(Adds comment, updates prices)
* Dollar index hits six week low
* Speculators raise bullish bets on silver
By Sethuraman N R
April 19 (Reuters) - Gold prices scaled a more than seven-week peak on Monday as a softer dollar and lower U.S. Treasury yields lifted the yellow metal's appeal even as the appetite for riskier assets remained strong.
Spot gold XAU= rose 0.3% to $1,781.03 per ounce by 1152 GMT, having earlier touched its highest since Feb. 25 at $1,789.77.
U.S. gold futures GCv1 rose 0.1% to $1,781.90 per ounce.
"The fact that we managed to break above $1,765 and close above on Friday is likely to have attracted some renewed speculative buying from trend and momentum players," Saxo Bank analyst Ole Hansen said.
"Most of these (players) are price-driven, so when the price tells them that there's a change in the outlook, they have to get involved," while fundamentally, gold is being driven by the continued drop in bond yields, Hansen added.
Benchmark U.S. 10-year Treasury yields eased, reducing the opportunity cost of holding non-interest bearing gold, while the dollar .DXY fell to a more than six-week low against rivals, making gold affordable for other currency holders. USD/ US/
Bullion has dropped 6% so far this year, mostly pressured by surging U.S. yields.
Gold's gains accompanied a jump in world shares as markets were generally upbeat about the prospects for a global economic recovery from the COVID-19 pandemic. MKTS/GLOB
"It seems that the Federal Reserve has succeeded in convincing markets that the latest rise in inflation will be only temporary and that the ultra-expansionary monetary policy will remain in place despite the brightening economic outlook," Commerzbank (DE:CBKG) analysts said in a note. silver XAG= rose 0.3% to $26.02 per ounce after hitting a near one-month high in the last session. Palladium XPD= rose 1.9% to $2,829.95, while platinum XPT= gained 0.5% to $1,208.51.
Speculators cut their bullish positions in COMEX gold and raised them in silver contracts in the week to April 13, data showed on Friday.