* Dollar pinned near multi-week lows, Treasury yield below 1.6%
* Palladium hovers near Wednesday’s record peak of $2,891.20/oz
* Long-running tightness in market fuelling palladium’s rise-HSBC (Adds comments, updates prices)
By Shreyansi Singh
April 22 (Reuters) – Gold prices steadied near a two-month high on Thursday, a whisker away from the key $1,800 threshold as the U.S. dollar faltered with easing Treasury yields, while supply concerns kept palladium anchored near last session’s record peak.
Spot gold was little changed at $1,790.88 per ounce by 0543 GMT, after hitting its highest since Feb. 25 at $1,797.67. U.S. GCv1 eased 0.1% to $1,791.20 per ounce.
“What’s obviously underpinning the upswing (in gold) is the dynamic in U.S. Treasuries … which is sort of pushing lower in the very short term,” said IG Market analyst Kyle Rodda, adding that a drop below 1.5% in yields could help push gold above $1,800, a key psychological level.
The benchmark 10-year U.S. Treasury yield was pinned below 1.6%, reducing the opportunity cost of holding non-yielding bullion. The held near multi-week lows against most major currencies. USD/ US/
“(Gold) Prices could easily move above the $1,800 level in the next couple of days,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
“There is still a lot of uncertainty in global markets. COVID-19 cases continue to be at record highs in a lot of countries and there is this whole revaluation about global growth prospects that should help safe haven assets.”
Market participants also awaited a European Central Bank meeting due later in the day.
Palladium eased 0.2% to $2,871.33 an ounce, having surged to an all-time high of $2,891.20 per ounce on Wednesday.
“Long running tightness in the market is fuelling the metal’s rise as auto demand remains strong,” HSBC analysts wrote in a note, adding that they expect prices to be volatile.
The auto-catalyst metal has surged nearly 25% since Russia’s Nornickel , the world’s largest producer of the metal, partly suspended operations at two of its mines in late February.
eased 0.6% to $26.42 per ounce and platinum slipped 0.2% to $1,211.26.