PRECIOUS-Gold holds in tight range after Powell policy comments

* Powell says economy still needs Fed support
* Powell testimony to resume at 1500 GMT
* U.S. 10-year yields hover near one-year high

(Updates prices)
By K. Sathya Narayanan
Feb 24 (Reuters) - Gold edged higher on Wednesday on a
weaker dollar but the metal held in a tight range as investors
digested monetary policy cues from Federal Reserve Chair Jerome
Powell.
Spot gold XAU= was up 0.2% at $1,807.70 per ounce by 1235
GMT. U.S. gold futures GCv1 rose 0.2% to $1,808.90.
Powell told the U.S. Senate Banking Committee that monetary
policy still needed to be accommodative with economic recovery
"uneven and far from complete". His testimony continues later in
the day. He also mentioned that the increase in bond yields was due
to higher inflation and growth expectations. "Powell did say that the recent run-up in bond yields was a
statement of confidence in the U.S. economy, and that ... could
mean the Fed is willing to allow rates to run even higher, which
will create a challenge for gold," Saxo Bank analyst Ole Hansen
said.
"For gold to recover again, it needs to be the inflation
focus. The focus has faded and has been substituted by the
current nervousness about the yields going higher."
U.S. Treasury yields US10YT=RR hovered close to a one-year
high, while the dollar .DXY eased 0.1% against key rivals,
holding near a six-week low it touched in the previous session.
US/ USD/
Rising yields tend to hurt bullion's appeal as an inflation
hedge since they increase the opportunity cost of holding the
metal.
But Powell's remarks also indicated that "the stimulus trade
is unlikely to go away anytime in the next six months", Michael
Langford, director at corporate advisory AirGuide said, adding
the potential impact of inflation as a result of stimulus
measures will be a key upward driver for gold.
Silver XAG= rose 0.6% to $27.78 an ounce. Platinum XPT=
climbed 2.5% to $1,267.38, while palladium XPD= added 0.9% to
$2,372.27.
The market expects the price difference between gold and
platinum to narrow, amid an outlook for higher demand for
auto-catalysts due to new green technologies, Saxo Bank's Hansen
said.