PRECIOUS-Gold rises as U.S. Treasury yields, dollar pause

* Yields in narrow range as investors await economic signals

* Dollar steadies near weakest in about seven weeks

* Spot gold may enter $1,744-$1,758 range, technicals show (Adds comment, updates prices)

April 20 (Reuters) – Gold gained on Tuesday as a rise in U.S. Treasury yields stalled and the dollar steadied near multi-week lows.

Spot gold was up 0.4% to $1,775.46 per ounce by 11:36 a.m. EDT (1536 GMT), after hitting $1,789.77 on Monday, its highest level since Feb. 25.

U.S. gold futures climbed 0.3% to $1,775.60.

U.S. Treasury yields eased and held in a narrow range as investors awaited further market developments, while the dollar index steadied near its lowest level in about seven weeks.

“Gold’s recent upward momentum has been driven by the fact that bonds are well bid and the USD is under pressure,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

“Gold is likely to hold in the new range of $1,760-$1,810 until we get another clear market driver. We may need to wait for the FOMC (Federal Open Market Committee) and see if there’s a change in tone as well as how the next round of Treasury auctions go, but, overall bonds feel in demand,” Wong added.

The U.S. central bank’s rate-setting FOMC will hold its next policy meeting April 27-28.

Gold, considered a hedge against inflation given the unprecedented stimulus doled out by central banks, has been in a tussle with yields, since higher yields translate into a higher opportunity cost of holding the non-interest bearing bullion.

Gold can still move higher as “there is too much liquidity in the market and it is going to stay that way for quite some time, even though we have got the green shoots of recovery looking quite strong in certain regions,” StoneX analyst Rhona O’Connell said.

On a technical note, gold’s failure to break resistance at $1,785 may drive it back to a range of $1,744 to $1,758, Reuters technical analyst Wang Tao said.

Silver was little changed at $25.82 per ounce, palladium dropped 2.6% to $2,738.60 and platinum slipped 1.6%, to $1,187.63.

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