Gold rises as dollar rally pauses, yields ease

Gold rose on Thursday as a slight pullback in the dollar and US bond yields helped bullion regain some its appeal as an inflation hedge against the backdrop of President Joe Biden's multi-trillion-dollar infrastructure investment plan.

Spot gold rose 0.4% to $1,713.10 per ounce by 1052 GMT, after touching its lowest since March 8 at $1,677.61 on Wednesday. Most markets will be closed for Good Friday on April 2.

US gold futures were steady at $1,715.70 per ounce.

"The forces (dollar and US yields) that pressured gold prices lower earlier this week have tapered and we're seeing some buying on dips as well," said Xiao Fu, head of commodities markets strategy at Bank of China International.

"After Biden's infrastructure plan details, the market focus has shifted back to this potential inflation prospect. But I wouldn't say it's a big reversal in trend. Gold is still a range-bound market with upside limited by rising 10-year yields."

The dollar index backed off from a five-month high, making gold less expensive for holders of other currencies. Benchmark US Treasury yields also eased.

On Wednesday, Biden announced his long-awaited $2 trillion-plus job plan, including $621 billion to rebuild infrastructure.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

"The support zone of $1,675 worked perfectly for gold, generating a solid rebound. However, the main trend has not changed and continues to point lower," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

"A climb above $1,720 would be positive for bullion prices, while only a clear recovery above $1,750 would turn around the current bearish outlook."

Silver eased 0.3% to $24.32 per ounce, while platinum fell 0.6% to $1,180.09 and palladium rose 0.2% to $2,623.43.