PRECIOUS-Gold gains for third day as bond yields, dollar retreat

* $1.9 trillion U.S. COVID-19 bill wins final approval
* ECB signals faster bond buys in coming quarter
* Greater upside in other assets than in gold - analyst

(Adds ECB policy decision, updates prices)
By Asha Sistla
March 11 (Reuters) - Gold prices gained for a third straight
session on Thursday, hitting a one-week peak as softer inflation
data in the United States pressured Treasury yields and the
dollar index.
Spot gold XAU= was up 0.4% at $1,733.71 per ounce by 1314
GMT, after hitting its highest since March 3 at $1,739.63
earlier. U.S. gold futures GCv1 climbed 0.6% to $1,732.90.
"Real rates are falling again and the lower real rates are,
the better it is for gold. The second element is the strength in
dollar we have seen recently has ended again and this is also
helping gold," said UBS analyst Giovanni Staunovo.
U.S. 10-year Treasury yields US10YT=RR held near a
one-week low, while the dollar fell as data showed U.S. core
consumer price growth slowed slightly in February. USD/ US/
While gold is considered a hedge against inflation from
widespread stimulus, higher bond yields this year have
threatened that status as they translate into a higher
opportunity cost of holding bullion.
The $1.9 trillion U.S. COVID-19 relief bill was finally
approved on Wednesday and is expected to supercharge the
economic recovery. "At the moment it's (relief bill) helping gold due to higher
inflation expectations but it could also mean that the U.S.
Federal Reserve starts to change its tone a little bit," said
UBS's Staunovo, adding that a less dovish Fed could see gold
prices remain under pressure.
The European Central Bank signalled faster money-printing
and said it would use its 1.85 trillion Pandemic Emergency
Purchase Programme more generously over the coming months to
stop any unwarranted rise in debt financing costs. Michael Langford, director at corporate advisory AirGuide
said there was a greater upside in other assets like copper and
small-cap equities than in gold in the short term. Silver XAG= gained 0.5% to $26.30 an ounce. Palladium
XPD= climbed 1.2% to $2,333.27, while platinum XPT= rose
1.5% to $1,220.68.