PRECIOUS-Gold slips on buoyant bond yields; set for weekly gain

* U.S. PPI accelerates 4.2% year-on-year
* Palladium faces biggest weekly decline in six weeks

(Updates prices)
By Shreyansi Singh
April 9 (Reuters) - Gold prices fell more than 1% on Friday,
weighed down by a jump in U.S. Treasury yields and a rebound in
the dollar, but bullion was still on course for its first weekly
gain in three weeks.
Spot gold XAU= was 0.7% lower at $1,744.07 per ounce by
1:44 p.m. EDT (1744 GMT), having hit its highest price since
March 1 at $1,758.45 on Thursday. For the week, however, prices
were up about 0.9%.
U.S. gold futures GCv1 settled down 0.8% at $1,744.8.
"While overall, gold market is bullish short-term, with
expectations of a break higher through $1,760-65, caution about
fresh 10- and 30-year (Treasury) auctions and the CPI report
next week are keeping yields supported, keeping gold's advance
in check," said Tai Wong, head of base and precious metals
derivatives trading at BMO.
"Yields are driving most markets at (the) moment, directly
impacting USD and stocks and all three matter to gold with
varying impact."
The dollar .DXY and benchmark U.S. yields rebounded from
two-week lows, reducing gold's appeal. US/ USD/
U.S. producer prices increased more than expected in March,
resulting in the largest annual gain in 9-1/2 years, fitting
with expectations for higher inflation as the economy reopens.
"This type of potentially inflationary environment is
generally viewed as supportive for gold," said David Meger,
director of metals trading at High Ridge Futures.
In a potential fillip to gold's safe-haven appeal, U.S.
Federal Reserve Chair Jerome Powell on Thursday signalled the
central bank is nowhere near reducing its economic support, and
warned an uptick in COVID-19 cases could slow the recovery.
"Gold's retreat from last year's peak is a 'mini-correction'
in a longer bull market," said Davis Hall, head of capital
markets in Asia at Indosuez wealth management.
Silver XAG= fell 0.8% to $25.23 per ounce, while platinum
XPT= shed 2.1%, to $1,203.69.
Palladium XPD= rose 0.6% to $2,640.21 per ounce, but was
on track for its biggest weekly fall since the week ending Feb.
26.