Feb 23 (Reuters) - Gold prices hovered near a one-week peak on Tuesday after gaining 1.5% in the previous session, as U.S. Treasury yields retreated, lifting the appeal of the bullion.
FUNDAMENTALS
* Spot gold XAU= rose 0.1% to $1,809.57 per ounce by 0057 GMT, having hit its highest since Feb. 16 at $1,812.31 on Monday. U.S. gold futures GCv1 gained 0.1% to $1,809.30.
* The dollar reached multi-year lows on Monday against the British pound and the Australian dollar as traders focused on the promise of coronavirus vaccinations and economic growth outlook. USD/
* Benchmark U.S. Treasury yields US10YT=RR eased from a near one-year peak on Monday. Higher yields increase the opportunity cost of holding bullion. US/
* U.S. President Joe Biden on Monday launched changes to the U.S. coronavirus aid program for small businesses to try to reach smaller and minority-owned firms. The advancement of a proposed $1.9 trillion U.S. COVID-19 relief bill added to concerns about inflationary pressures. Gold is often viewed as a hedge against inflation. The European Central Bank is "closely monitoring" the recent rise in government bond yields, ECB President Christine Lagarde said on Monday, the clearest sign yet that policymakers are becoming uncomfortable with the recent surge in borrowing costs. Bitcoin fell on Monday after surging to its latest record high a day earlier as a sell-off in global equities curbed risk appetite. The United States on Monday crossed the staggering milestone of 500,000 COVID-19 deaths. Investors now await the testimony of U.S. Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress on Tuesday. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 1.1% to 1,115.4 tonnes on Monday. Silver XAG= eased 0.4% to $28.04 an ounce. Platinum XPT= shed 0.4% to $1,267.46, while palladium XPD= climbed 0.3% to $2,401.52.