PRECIOUS-Gold rises over 1% as retreat in dollar, yields boost allure

* Silver jumps to two-month high, platinum rises 3.8%
* Palladium firms near $3,000 mark
* U.S. manufacturing sector slows in April

(Updates prices)
By Sumita Layek
May 3 (Reuters) - Gold prices jumped more than 1% on Monday,
with the rally spilling over into other precious metals as well,
driven by a retreat in the dollar and U.S. Treasury yields.
Spot gold XAU= rose 1.3% to $1,791.26 per ounce by 1:42
p.m. EDT (1742 GMT), after hitting its highest since April 22 at
$1,797.75. U.S. gold futures GCv1 settled 1.4% higher at
$1,791.80.
"A combination of bond yields remaining tame, the dollar
under pressure, the amount of fiscal and monetary stimulus in
this market ... all of those factors continue to drive gold and
silver prices higher," said David Meger, director of metals
trading at High Ridge Futures.
The dollar index .DXY slipped 0.3%, making gold cheaper,
while benchmark U.S. 10-year Treasury yields US10YT=RR also
retreated, reducing the opportunity cost of holding non-interest
bearing gold. USD/ US/
Gold also found support from data showing U.S. manufacturing
activity grew at a slower pace in April. Investors now await Friday's labour market numbers to gauge
U.S. economic health.
But strong economic data can also push gold higher as it
means inflation will rise, said Michael Matousek, head trader at
U.S. Global Investors.
"We need to see gold get above the $1,800 level and sustain
it for a little bit, and then it could be off to the races for
$2,000."
Gold is considered a hedge against inflation.
Elsewhere, auto catalyst metal palladium XPD= rose 1% to
$2,962.94 per ounce, after hitting an all-time high of $3,007.73
on Friday.
While output cuts by the automobile sector necessitated by a
shortage of semiconductor components could reduce palladium
demand this year, the impact would be relatively small compared
with production losses from Russia's Nornickel, with a sizeable
market deficit still expected, Heraeus Precious Metals said in a
note. Silver XAG= gained 3.6% to $26.84 per ounce after hitting
$26.98, its highest mark since March 1. Platinum XPT= rose
2.6% to $1,229.84.