March 2 (Reuters) - Gold prices edged higher on Tuesday as a retreat in U.S. Treasury yields and optimism over the $1.9 trillion coronavirus relief bill lifted the allure of the non-yielding metal.
FUNDAMENTALS
* Spot gold XAU= was up 0.2% at $1,726.84 per ounce by 0046 GMT. U.S. gold futures GCv1 added 0.1% to $1,723.80.
* Benchmark U.S. Treasury yields eased further from a one-year high hit last week as Federal Reserve officials continued to downplay runaway inflation concerns. US/
* While gold is considered a shield against inflation, higher yields have of late threatened that status, since they translate into higher opportunity cost of holding bullion, which pays no return.
* The U.S. Senate will start debating President Joe Biden's coronavirus relief bill this week, Senate Majority Leader Chuck Schumer said on Monday. U.S. manufacturing activity increased to a three-year high in February amid a surge in new orders. The European Central Bank slowed its net purchases of debt last week even as borrowing costs jumped in the financial markets, casting a shadow over a nascent recovery in the pandemic-stricken euro zone economy. U.S. bank Wells Fargo (NYSE:WFC) WFC.N said it has expanded its precious metals trading business, filling gaps in the market left by the withdrawal of Bank of Nova Scotia ( Scotiabank ) BNS.TO . Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , fell 0.8% to 1,084.5 tonnes on Monday. GOL/ETF
* Silver XAG= gained 0.5% to $26.60 an ounce, while palladium XPD= climbed 0.4% at $2,358.16. Platinum XPT= rose 0.7% to $1,193.45.
DATA/EVENTS (GMT) 0330 Australia RBA Cash Rate
March 0700 UK
Nationwide House Price MM, YY Feb 0855 Germany
Unemployment Chg, Rate Sa
Feb 1000 EU
HICP Flash YY
Feb 1000 EU
HICP-X F&E Flash YY
Feb