PRECIOUS-Gold hits 7-week peak on easing dollar, U.S. yields

(Adds comment, updates prices)
* Dollar index hits six week low
* Speculators raise bullish bets on silver

By Sethuraman N R
April 19 (Reuters) - Gold prices scaled a more than
seven-week peak on Monday as a softer dollar and lower U.S.
Treasury yields lifted the yellow metal's appeal even as the
appetite for riskier assets remained strong.
Spot gold XAU= rose 0.3% to $1,781.03 per ounce by 1152
GMT, having earlier touched its highest since Feb. 25 at
$1,789.77.
U.S. gold futures GCv1 rose 0.1% to $1,781.90 per ounce.
"The fact that we managed to break above $1,765 and close
above on Friday is likely to have attracted some renewed
speculative buying from trend and momentum players," Saxo Bank
analyst Ole Hansen said.
"Most of these (players) are price-driven, so when the price
tells them that there's a change in the outlook, they have to
get involved," while fundamentally, gold is being driven by the
continued drop in bond yields, Hansen added.
Benchmark U.S. 10-year Treasury yields eased, reducing the
opportunity cost of holding non-interest bearing gold, while the
dollar .DXY fell to a more than six-week low against rivals,
making gold affordable for other currency holders. USD/ US/
Bullion has dropped 6% so far this year, mostly pressured by
surging U.S. yields.
Gold's gains accompanied a jump in world shares as markets
were generally upbeat about the prospects for a global economic
recovery from the COVID-19 pandemic. MKTS/GLOB
"It seems that the Federal Reserve has succeeded in
convincing markets that the latest rise in inflation will be
only temporary and that the ultra-expansionary monetary policy
will remain in place despite the brightening economic outlook,"
Commerzbank analysts said in a note. Elsewhere, silver XAG= rose 0.3% to $26.02 per ounce after
hitting a near one-month high in the last session. Palladium
XPD= rose 1.9% to $2,829.95, while platinum XPT= gained 0.5%
to $1,208.51.
Speculators cut their bullish positions in COMEX gold and
raised them in silver contracts in the week to April 13, data
showed on Friday.