PRECIOUS-Gold rebounds as dollar, U.S. yields pull back

* Gold's 'short term bounce' not reversal of bigger trend-
analyst
* Platinum rises as much as 3.5%
* SPDR Gold holdings hit lowest since April 2020

(Adds comments, updates prices)
By Shreyansi Singh
March 9 (Reuters) - Gold rose nearly 2% on Tuesday, as it
gained respite from a retreat in U.S. Treasury yields and the
dollar following a slide to a nine-month low in the last
session.
Spot gold XAU= rose 1.5% to $1,706.01 per ounce by 1308
GMT, having earlier risen as much as 1.8% to $1,711.16.
U.S. gold futures GCv1 climbed 1.4% to $1,701.80.
"Given the metal's zero-yielding nature, falling yields may
provide a tailwind for bulls to elevate prices higher," said
Lukman Otunuga, senior research analyst at FXTM.
But while gold may extend gains near term, "fundamentally,
the pendulum swings in favour of bears especially when factoring
in how global sentiment is improving on vaccine rollouts and
COVID-19 cases are falling globally."
U.S. 10-year Treasury yields US10YT=RR eased, and the
dollar slipped against rival currencies. USD/
Gold is also being propped up by some bargain hunting, said
StoneX analyst Rhona O'Connell.
But there's a split, as "some people think the bond market
has got a long way further to go downwards, (while) other people
are saying that because of the distribution of positioning, some
managers may be starting to look at rebalancing."
Higher bond yields have challenged bullion's status as an
inflation hedge this year, pushing gold prices to their lowest
since June 5 at $1,676.10 on Monday. US/
Gold's current move "is a short-term bounce and not a
reversal of the bigger trend," said analyst Xiao Fu at Bank of
China International.
The exchange-traded fund outflows are indicating diminishing
investor interest, she added.
Holdings of the world's largest gold-backed ETF, SPDR Gold
Trust GLD , fell to their lowest since April 2020 on
Monday. GOL/ETF
Meanwhile, European Central Bank policymakers were divided
on the merits of intervening by increasing bond purchases, ahead
of their meeting on Thursday.
Silver XAG= rose 2.8% to $25.78 an ounce. Palladium XPD=
fell 0.7% to $2,300.23. Platinum XPT= gained 2.9% to
$1,168.46, having risen as much as 3.5% earlier.