PRECIOUS-Gold gains ground as yields, dollar dip after Fed holds rates

* Gold hits near two-week low of $1,762/oz
* Palladium slips from record highs hit on Tuesday

(Recasts, adds comments, updates prices)
By Eileen Soreng
April 28 (Reuters) - Gold prices gained on Wednesday, as the
dollar and U.S. Treasury yields eased after the U.S. Federal
Reserve kept interest rates unchanged and re-affirmed its
accommodative policy to support the economic recovery.
Spot gold XAU= rose 0.2% to $1,780.56 per ounce by 3:28
p.m. EDT (1928 GMT), having earlier dipped to its lowest since
April 16 at $1,762. U.S. gold futures GCv1 settled down 0.3%
at $1,773.9.
The Fed held interest rates and its bond-buying program
steady after its two-day policy meet, nodding to the economy's
growing strength but gave no indication it was ready to reduce
its support for the economic recovery. "Bonds rallied, USD retreated sharply, and gold rallied to
highs of the day after a test of the lows of the range earlier
after Powell took great pains to emphasize there will be no
tapering in Fed's accommodative policy," said Tai Wong, head of
metals derivatives trading at BMO.
"The Fed has probably set gold up for a test of the top of
the $1,800-$1,810 range, but it is unclear whether there is
enough momentum to break above without a deeper drawdown in the
dollar," he added.
Benchmark U.S. 10-year Treasury yields reversed course after
rising to a two-week high earlier, raising bullion's appeal. The
dollar also fell, making the bullion cheaper for holders in
other currencies. US/
While gold is considered a hedge against the inflation that
could follow widespread stimulus, elevated Treasury yields have
dulled non-yielding bullion's appeal and has pushed gold down 6%
so far this year.
Goldman Sachs, meanwhile, sees gold at $2,000 an ounce over
the next six months and said it was too early for bitcoin to
compete with gold for safe-haven demand. Elsewhere, palladium XPD= inched 0.1% lower to $2,939.83
per ounce, having hit an all-time high of $2,962.50 on Tuesday.
Silver XAG= was flat at $26.23 per ounce, after reaching a
low since April 21 at $25.80.
Platinum XPT= eased 0.4% to $1,223.38 per ounce.