PRECIOUS-Gold slips off 7-week peak as U.S. yields gain

(Updates prices)
* Dollar index hits six-week low
* Palladium jumps to over 1-year high
* Citi raises palladium 0-3 month forecast to $3,200/oz

By Eileen Soreng
April 19 (Reuters) - Gold retreated from a more than
seven-week peak on Monday as U.S. Treasury yields gained,
weighing on non-yielding bullion's appeal and countering support
from a weaker dollar.
Spot gold XAU= was down 0.3% at $1,770.97 per ounce by
1:41 p.m. EDT (1741 GMT) after touching $1,789.77, the highest
since Feb. 25. U.S. gold futures GCv1 settled down 0.5% at
$1,770.60.
"We're still probably going to see a gradual rise in U.S.
interest rates along with gradual steepening of the yield curve,
and that should take some steam out of gold," said TD Securities
commodity strategist Daniel Ghali.
The benchmark 10-year yield US10YT=RR rose above 1.6%
after hitting a multi-week low last week.
Bullion has shed more than 6% so far this year, mostly
pressured by surging U.S. yields. But capping gold's declines
was a weaker dollar .DXY , which slid to a more than six-week
low against rivals. USD/
"The physical market has also provided good support,
cushioning prices on dips below $1,700/oz," said Standard
Chartered analyst Suki Cooper.
"Demand in India and China has bounced back from low levels
and central banks swung to net buying in February." GOL/AS
China, the world's biggest gold consumer, has given domestic
and international banks permission to import large amounts of
gold into the country, five sources familiar with the matter
said. Among other precious metals, silver XAG= fell 0.6 % to
$25.80 per ounce. Platinum XPT= inched 0.1% higher to
$1,204.00.
Palladium XPD= climbed 1.5% to $2,819.21 per ounce, after
rising to $2,845.50, the highest since February 2020.
"Palladium is set to continue to move higher owing to a
recovery in automotive output, the increasing probability of
rhodium to palladium substitution, and ongoing supply
disruptions," Citi Research said in a note.
It raised its 0-3 month point price forecast to $3,200 per
ounce from $3,000.