* Benchmark 10-year U.S. Treasury yields rise above 1.6%
* Dollar drops to near seven-week low
* Spot gold may slide into $1,744-$1,758/oz range – technicals (Recasts, adds chart, and updates prices)
April 20 (Reuters) – Gold prices inched lower on Tuesday after hitting a seven-week high in the previous session, as a rebound in U.S. Treasury yields eclipsed support from a weaker dollar.
Spot gold was down 0.1% at $1,768.01 per ounce by 0711 GMT, after hitting $1,789.77 on Monday, its highest since Feb. 25.
U.S. gold futures eased 0.1% to $1,769 per ounce.
“Gold came off Monday’s high against a backdrop of rising yields. But the rise in yields didn’t echo into the dollar. The greenback’s soggy performance is supportive for gold,” said DailyFX currency strategist Ilya Spivak.
Benchmark 10-year U.S. Treasury yields elevated above 1.6% after hitting a five-week low last week, increasing the opportunity cost of holding non-yielding bullion.
U.S. President Joe Biden met on with a bipartisan group of lawmakers who have all served as governors or mayors, as the White House seeks a deal on his over $2 trillion jobs and infrastructure proposal.
Gold is seen as a hedge against inflation that could follow stimulus measures, but higher Treasury yields have dulled some of the appeal of the non-yielding commodity this year.
“As it comes to inflation, the more inflation we get and the less the Federal Reserve is able to ignore that, the worst for gold it is… Technically, gold’s trend is still pointing lower,” DailyFX’s Spivak said.
Although the U.S. central bank has reiterated its stance to keep monetary policy accommodative some time, Fed officials have said any spike in inflation is likely to be temporary.
Offering some respite to bullion, the dollar index weakened to a near seven-week low against its rivals, making gold less expensive for holders of other currencies.
Spot gold may slide more into a range of $1,744 to $1,758 per ounce, following its failure to break a resistance at $1,785, according to Reuters technical analyst Wang Tao.
Silver gained 0.3% to $25.88 per ounce, palladium dropped 0.3% to $2,803.69 and platinum was steady at $1,205.20.
Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips