* Fed Chair Powell reaffirms extended loose monetary policy<\/p>\n
* SPDR Gold Trust holdings slip to lowest since May 2020<\/p>\n
* Palladium scales more than one-month high (Adds comments, updates prices)<\/p>\n
Feb 25 (Reuters) – Gold prices fell 1% on Thursday as U.S. treasury yields remained elevated, with bullion\u2019s safe haven appeal also hit by bets for a faster global economic recovery.<\/p>\n
Spot gold fell 0.6% to $1,793.39 per ounce by 1039 GMT, after falling as much as 1% earlier in the session. U.S. gold futures eased 0.4% to $1,791.00 per ounce.<\/p>\n
\u201cRising Treasury yields on a better economic outlook in the second half of the year is putting pressure on the metal,\u201d Bank of China International analyst Xiao Fu said.<\/p>\n
While gold is often sought as a hedge against inflation, higher bond yields have eroded that status since they increase the opportunity cost of holding bullion.<\/p>\n
Gold\u2019s dip came despite a weaker dollar and U.S. Federal Reserve Chairman Jerome Powell\u2019s reiteration on Wednesday that monetary policy would be unchanged until the economy gets back to full employment.<\/p>\n
\u201cOverall, there are conflicting forces, we have the rising yields, but a weaker dollar,\u201d Bank of China\u2019s Fu said.<\/p>\n
Mirroring investor sentiment, holdings of the world\u2019s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to their lowest since May 2020 on Wednesday.<\/p>\n
Gold\u2019s weakness can be attributed to its inability to sustain above the $1,800 mark, even with a weakening dollar and stimulus packages that might lead to higher inflation, said Sunilkumar Katke, head of currencies and commodities at Axis Securities.<\/p>\n
\u201cBut, there are chances that once the market prices in all the positive factors driving riskier assets, and they start consolidating, gold might emerge back and hit the $2,000 level again this year.\u201d<\/p>\n
Among other precious metals, silver rose 0.3% to $28.06 an ounce. Platinum fell 1%, to $1,255.67 .<\/p>\n
Palladium was down 0.4% at $2,427.75 , having earlier climbed to a more than one-month high of $2,444.50.<\/p>\n