PRECIOUS-Gold edges up on weaker dollar and U.S. yields

* Benchmark 10-year U.S. Treasury yields fall below 1.6%

* Dollar drops to near seven-week low

* Spot gold may slide into $1,744-$1,758/oz range – technicals (Recasts, adds comment, updates prices)

April 20 (Reuters) – Gold prices inched higher on Tuesday, hovering below a seven-week peak hit in the previous session, bolstered by a pullback in U.S. Treasury yields and a weaker dollar.

Spot gold was up 0.1% to $1,770.40 per ounce at 1215 GMT, after hitting $1,789.77 on Monday, its highest since Feb. 25. U.S. gold futures climbed 0.1% to $1,772.70 per ounce. “The fact that the bond market has seemed to stabilise a little bit” is helping gold, said StoneX analyst Rhona O’Connell.

Benchmark 10-year U.S. Treasury yields fell below 1.6%, reducing the opportunity cost of holding non-yielding bullion.

A weaker dollar provided further support to gold. The dollar index hit a nearly seven-week low against its rivals, making gold less expensive for holders of other currencies.

Gold can still move higher as “there is too much liquidity in the market and it is going to stay that way for quite some time, even though we have got the green shoots of recovery looking quite strong in certain regions,” O’Connell added.

Bullion, also considered a hedge against inflation, has shed over 6% so far this year as higher bond yields have dulled the appeal of the non-yielding commodity. Bullion rose 25% last year.

On a technical note, gold’s failure to break resistance at $1,785 may drive it back to a range of $1,744 to $1,758 per ounce, Reuters technical analyst Wang Tao said.

Global shares edged further back from record highs on Tuesday as lofty sovereign bond yields and rising global COVID-19 cases made investors question high equity valuations.

Silver gained 0.2% to $25.85 per ounce, palladium dropped 2.1% to $2,753.50 and platinum fell 1.7%, to $1,185.55.