PRECIOUS-Gold heads for third weekly gain on lower yields, weaker dollar

* Gold up 0.8% so far this week
* Palladium off record peak
* Upcoming rise in inflation to keep gold supported-Fitch
Solutions

(Adds comment, updates prices)
By Sethuraman N R
April 23 (Reuters) - Gold edged higher on Friday and was on
track to register a third straight weekly gain supported by a
weaker dollar and lower U.S. Treasury yields, while investors
awaited a U.S. Federal Reserve policy meeting next week.
Spot gold XAU= rose 0.4% to $1,790.65 per ounce by 1156
GMT, having jumped to its highest since Feb. 25 at $1,797.67 on
Thursday, and has gained 0.8% so far this week.
U.S. gold futures GCv1 rose 0.4% to $1,789.40.
"The focus is turning to the Fed as in recent times we have
seen significant improvement in U.S. data. That's raising
speculation that the Fed might signal its intention to reduce
its emergency stimulus measures in the coming months," said
Fawad Razaqzada, market analyst with ThinkMarkets.
"There's an element of hesitation as people are just waiting
to see what the Fed says before decisively stepping in on the
long side."
U.S. 10-year Treasury yields US10YT=RR eased to 1.54%,
while the dollar .DXY fell 0.3%. US/ The Fed's next meeting ends on April 28, and while no major
policy changes are expected, investors are paying close
attention to any comments on possible scaling back of monetary
easing in the future.
"The upcoming rise in inflation in April-May 2021 will most
likely keep gold prices supported in the near term," Fitch
Solutions said in a note.
"However, prices will find strong resistance at the
$1,850/oz level and will struggle to break above this level as
inflation pressures will be temporary in our view."
Palladium XPD= rose 1.5% to $2,880.40 per ounce but was
off a record $2,891.50 hit on Thursday. Many analysts expect a
further run towards $3,000 as automakers ramp up purchases of
the metal, worsening a supply shortage. Silver XAG= added 0.2% at $26.22, and was set to gain for
a third straight week. Platinum XPT= rose 2.2% to $1,229.23.