* Palladium jumps as much as 4.7%
* Focus turns to ECB policy meeting on Thursday
* Gold hits near two-month peak at $1,797.41/oz
(Recasts, adds comment, updates prices)
By Eileen Soreng
April 21 (Reuters) - Gold jumped 1% on Wednesday propelled
by sliding U.S. Treasury yields, while bets for supply
shortfalls powered auto-catalyst metal palladium to a record
high.
Spot gold had risen 0.8% to $1,791.51 per ounce by
11:10 a.m EDT (1510 GMT), having earlier hit its highest since
Feb. 25 at $1,797.41. U.S. gold futures gained 0.7% to
$1,790.40.
"Gold's pain over the last couple of months has been the
rising Treasury yields and now that has pretty much been
alleviated," said Edward Moya, senior market analyst at OANDA.
"The current outlook for the global economy is still
mixed... You're going to see a much more cautious approach in
the next quarter and that's probably going to see gold start to
see some safe haven flows," Moya added.
Benchmark 10-year U.S. Treasury yields
languished below 1.6%, reducing the opportunity cost of holding
non-interest bearing gold.
Bullion got a further lift from a subdued Wall Street and
also seemed to largely overlook a firmer U.S. dollar.
Market participants await a European Central Bank meeting on
Thursday and a U.S. Federal Reserve policy meeting next week.
The technical scenario for gold has improved since prices
broke above key resistance at $1,750, ActivTrades Chief Analyst
Carlo Alberto De Casa said in a note, adding any news regarding
more monetary stimulus could be seen as a further positive
market driver.
Palladium soared to an all-time high of $2,891.20 per
ounce and was last up 4.4% at $2,883.80.
Palladium is "benefiting from firming commodity demand
readings and expectations for deficits following the Arctic mine
disruptions," TD Securities said in a note.
Prices of palladium, used in catalytic converters to clean
car exhaust fumes, have risen over 23% since Russia's Nornickel
, the world's largest palladium producer, partly
suspended operations at two of its mines on Feb. 24.
Silver rose 2.1% to $26.42 per ounce, while platinum
was 1.4% higher at $1,203.53.
(Reporting by Eileen Soreng in Bengaluru; Editing by Nick
Macfie)
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