PRECIOUS-Gold rises on dollar weakness, Powell's dovish comments

* Powell says economy still needs Fed support
* Holdings of SPDR Gold Trust fell 0.4% on Tue

(Updates prices)
By Sumita Layek
Feb 24 (Reuters) - Gold prices gained on Wednesday, hovering
close to a one-week high hit in the previous session, as a
weaker dollar and remarks by Federal Reserve Chairman Jerome
Powell that the U.S. economy still needed support boosted
bullion's appeal.
Spot gold XAU= rose 0.2% to $1,808.01 per ounce by 0714
GMT, having hit its highest since Feb. 16 at $1,815.63 on
Tuesday. U.S. gold futures GCv1 were steady at $1,806.20.
"Powell was just credible enough on his dovishness... so
gold had more room to breathe," said Stephen Innes, chief global
market strategist at financial services firm Axi, adding that a
weaker dollar was also supporting bullion prices.
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. Further supporting gold, the dollar .DXY eased against
rivals, while benchmark 10-year U.S. Treasury yield US10YT=RR
also fell. US/ USD/
In the near term, gold will continue to react to the moves
in bond yields, Innes said.
Easy monetary policy tends to weigh on government bond
yields, increasing the appeal of non-yielding gold. US/
Powell's remarks indicated that "the stimulus trade is
unlikely to go away anytime in the next six months," said
Michael Langford, director at corporate advisory AirGuide.
A depreciation in the U.S. dollar and potential impact of
inflation as a result of stimulus measures will be key drivers
for gold, he added.
Investor focus remains on a $1.9 trillion coronavirus relief
aid that is expected to pass later this week. Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , fell 0.4% to 1,110.44 tonnes on
Tuesday from 1,115.4 tonnes on Monday. GOL/ETF
Among other precious metals, silver XAG= rose 0.1% to
$27.65 an ounce. Platinum XPT= climbed 0.4% to $1,241.50,
while palladium XPD= added 0.3% to $2,357.58.