(New throughout, adds analyst comments, updates prices)
* Silver holds above more than two-month high
* Dollar eases off over four-month peak
* Gold trapped in range bound trade - analyst
By Brijesh Patel
March 26 (Reuters) - Gold edged higher on Friday as concerns
over surging coronavirus cases in Europe and a pullback in the
dollar offset pressure from rising U.S. Treasury yields,
although bullion was still on track for its first weekly decline
in three.
Spot gold was up 0.1% at $1,728.08 per ounce by 1018
GMT. Bullion is down nearly 1% so far this week. U.S. gold
futures were up 0.2% at $1,727.90 per ounce.
"The dollar is slightly weaker today but gold has been very
resilient recently despite strength in the dollar and rising
Treasury yields," said Xiao Fu, head of commodities markets
strategy at Bank of China International.
"On the other hand, we have rising geopolitical risks and a
third wave of the pandemic supporting gold prices as well," she
added.
The dollar index eased from a more than four month
peak hit in the previous session. Recent better-than-expected
economic readings out of the United States lifted prospects of a
strong U.S. economic recovery and strengthened the U.S.
currency.
Sentiment in wider financial markets, for most part of the
week, remained subdued as worries about new lockdowns and a slow
pace of vaccination in the euro zone weighed on risk appetite
among investors.
However, benchmark U.S. Treasury yields edged towards a more
than one-year high hit last week, increasing the opportunity
cost of holding non-interest bearing gold.
"A stronger dollar and higher yields continue to spur
further liquidation primarily from the ETF (exchange-traded
fund) community," said Joseph Stefans, Head of Trading at
MKS.
"I think gold is trapped in a bit of a range here and I can
see it trading sideways over the next week or so."
Elsewhere, silver rose 0.5% to $25.14, holding above
an over two-month low of $24.39 per ounce hit on Thursday.
Palladium gained 0.8% to $2,630.31 and platinum
rose 0.6% to $1,153.87.
(Reporting by Brijesh Patel in Bengaluru;Editing by Elaine
Hardcastle)
.Source
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