PRECIOUS-Gold firms as dollar, yields retreat; palladium hits 1-year high

* Fed's two-day meeting starts later on Tuesday
* Russia's Nornickel downgrades 2021 output forecast
* Platinum jumps more than 1%

(Recasts, adds comments, updates prices)
By Brijesh Patel
March 16 (Reuters) - Gold gained on Tuesday on a slight
retreat in the dollar and U.S. Treasury yields ahead of a
Federal Reserve meeting, while auto-catalyst metal palladium
scaled a one-year peak after a top producer cut its 2021 output
forecast.
Spot gold XAU= was up 0.1% at $1,734.11 per ounce by 1214
GMT. U.S. gold futures GCv1 edged 0.1% higher to $1,731.40.
"A bit of dollar weakness and a slight retracement in the
yields have given a little bit of a lift to gold, but gold has
got some technical resistance ahead, at $1,745/oz," said Ross
Norman, an independent analyst.
The benchmark 10-year U.S. Treasury yields eased from a more
than one-year touched last week, while the dollar .DXY fell
0.1% against its rivals. US/ US/
The U.S. central bank's Federal Open Market Committee ends
its two-day meeting on Wednesday. The Fed has kept interest
rates pinned near zero for the past year, and has promised to
keep them there until the economy reaches full employment.
"The Fed may address rising inflation concerns and even
consider to push forward asset purchasing to compensate for the
rising yields and that would be very positive for gold prices,"
said DailyFX strategist Margaret Yang.
Elsewhere, palladium XPD= jumped 5% to $2,507.37 per
ounce, after scaling a one-year high of $2,520.31 earlier in the
session.
Russia's Norilsk Nickel, the world's largest palladium
producer, said on Tuesday its 2021 metal production volumes may
fall short of its original guidance due to ongoing complications
with two waterlogged mines in Siberia. "Combination of market tightness coupled with significant
demand from the auto sector has conspired in a thin market to
see the market fantastically higher," independent analyst Norman
said.
Silver XAG= fell 0.7% to $26.09 an ounce, while platinum
XPT= gained 1.3% to $1,228.85.