* Bitcoin rally has also weakened gold's appeal- analyst
* U.S. Fed officials prepared to keep monetary policy easy
* Interactive graphic tracking global spread of coronavirus:
tmsnrt.rs/3mvcUoa
(Adds comments, updates prices)
By Nakul Iyer
Feb 18 (Reuters) - Gold prices rebounded from a 2-1/2-month
low on Thursday, as the non-yielding precious metal found
support from easing U.S. Treasury yields and a weaker U.S.
dollar.
Spot gold rose 0.6% to $1,786.81 per ounce by 0927
GMT, having dropped to its lowest since Nov. 30 at $1,768.60 on
Wednesday. U.S. gold futures advanced 0.8% to $1,786.20.
"The dollar (has) started quiet so we are seeing a bit of
short-covering or perhaps even a bit of bargain hunting on
gold," said David Madden, market analyst at CMC Markets UK.
Benchmark 10-year Treasury yields pulled back
from their highest since end-February 2020 hit on Wednesday,
reducing non-interest bearing bullion's opportunity cost.
The U.S. dollar also retreated, bolstering gold's appeal to
other currency holders.
The U.S. Federal Reserve reiterated its pledge to keep
interest rates near zero until inflation is "on track to
moderately exceed" its 2% target and the job market approaches
"maximum employment".
But analysts say gold's recent declines could continue given
optimism over an economic recovery that was bolstered by strong
U.S. retail sales data released on Wednesday.
"We're seeing a re-allocation under renewed optimism,
factory orders and general views of stronger underlying growth,"
said Michael Langford, director at corporate advisory AirGuide,
adding gold's typical attribute as an inflationary hedge was not
enough to counter the strong demand for other assets.
Analysts also said that the technical event of gold's 50-day
moving average price dipping below the 200-day moving average,
could lead to more selling.
While, "previously people would snap up gold as an
inflation hedge, we are now seeing people pour money into
Bitcoin" CMC's Madden said, noting that Bitcoin's rally could
have contributed to gold's recent declines.
Silver fell 0.3% to $27.26 an ounce. Platinum
gained 1% to $1,265.79 and palladium shed 0.5% to
$2,360.11.
(Reporting by Nakul Iyer and Sumita Layek in Bengaluru; editing
by Barbara Lewis)
Read more:PRECIOUS-Gold rebounds as rally in U.S. Treasury yields abate
