(Adds analyst comments, details, and updates prices)
* U.S. Treasury yields inch closer to fresh 13-month peak
* Dollar hovers near four-month peak
* Palladium inches up after Monday's 5.5% decline
By Asha Sistla
March 30 (Reuters) - Gold prices slipped on Tuesday to their
lowest in more than two weeks, weighed down by a firm U.S.
dollar and Treasury yields as expectations of a swift economic
turnaround grew with vaccination rates gaining traction.
Bullion, often sought as a safe store of value in times of
economic turmoil, is sensitive to rising yields as they raise
the opportunity cost of holding non-yielding gold.
Spot gold was down 0.3% at $1,706.86 per ounce by
0326 GMT. Earlier in the session, bullion touched $1,704, its
lowest since March 12.
U.S. gold futures were down 0.4% at $1,708 per ounce.
"Primary weighing factor on gold prices is the continuous
rise in the U.S. long-term yields," said DailyFX strategist
Margaret Yang, adding that although gold prices should rise
being an inflation hedge, there is a constant decline in prices.
This decline in gold prices, "can be attributed to reflation
hopes as this infrastructure plan will not only inject liquidity
into the market, it'll actually pump money into the real economy
... therefore, the economic outlook is brighter than before."
Longer-dated Treasury yields gained amid expectations that
U.S. President Joe Biden's infrastructure initiative could
further bolster economic growth.
Further pressuring gold, dollar climbed to a one-year high
against the yen on Tuesday as investors fretted about the
potential fallout from the collapse of a hedge fund, identified
as Archegos Capital.
"Gold's consolidation is breaking and if downward pressure
takes prices below the $1,700 level, it could get ugly fast,"
Edward Moya, senior market analyst at OANDA wrote in a note.
"Massive support throughout the pandemic has been the $1,670
level and if that doesn't hold, not much support is seen until
the $1,600 level."
Elsewhere, silver fell 0.3% to $24.59 an ounce and
platinum shed 0.3% at $1,171.63.
Palladium was up 0.1% at $2,530.06, having slid 5.5%
in the previous session.
(Reporting by Asha Sistla in Bengaluru, Editing by Sherry
Jacob-Phillips)
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