PRECIOUS-Gold subdued as yields rise ahead of U.S. Fed decision

* U.S. Fed decision due at 1800 GMT
* U.S. dollar gains for fourth session
* Climb above $1,740/oz opens space for more gains - analyst

(Recasts, adds comments, updates prices)
By Brijesh Patel
March 17 (Reuters) - Gold prices edged lower on Wednesday
due to a rise in U.S. bond yields and a stronger dollar, but the
metal traded in a narrow range as markets awaited the outcome of
the Federal Reserve's two-day monetary policy meeting later in
the day.
Spot gold XAU= was down 0.1% at $1,729.54 per ounce by
1157 GMT, having hit a two-week high in the previous session.
U.S. gold futures GCv1 eased 0.2% to $1,726.70.
Benchmark U.S. Treasury yields US10YT=RR rose to a new
13-month high, increasing the opportunity cost of holding gold,
while the dollar index .DXY gained for a fourth straight
session. USD/ US/
"Markets are concerned about inflation prospects, but the
Fed is less so. The biggest headwind for gold right now is
rising Treasury yields," said Xiao Fu, head of commodities
markets strategy at Bank of China International.
"But global central banks are still on an easing bias, which
means that gold prices won't fall too low."
All eyes are on the economic projections and policy
statement from the Fed scheduled for release at 1800 GMT,
followed by a news conference from Fed Chair Jerome Powell.
"While no change in U.S. monetary policy is expected at this
week's meeting, traders will be closely scrutinizing the Fed's
wording and Powell's comments regarding U.S. and global economic
growth and inflation prospects," said Kitco Metals senior
analyst Jim Wyckoff in a note.
Following solid gains in 2020, gold prices have come under
pressure this year as a recent spike in benchmark 10-year U.S.
Treasury yields weighed on the non-yielding commodity.
"From a technical point of view, a clear climb above $1,740
would open space for further gains, while a decline below the
$1,700 mark will show weakness," ActivTrades chief analyst Carlo
Alberto De Casa said.
Silver XAG= fell 0.5% to $25.84 an ounce. Palladium XPD=
fell 0.8% to $2,479.47, having hit a one-year high of $2,520.31
on Tuesday, and platinum XPT= dropped 1.6% to $1,192.47.