TD – PRECIOUS-Gold firms above $1,900/ounce on easing yields, dovish Fed

    * Markets await U.S. GDP, jobs data
    * U.S. Treasury yields at near two-week low
    * Fed can tame inflation without wrecking recovery -Clarida

 (Updates prices)
    By Sumita Layek
    May 26 (Reuters) - Gold prices firmed above the key $1,900
per ounce level on Wednesday, boosted by weaker U.S. Treasury
yields and expectations that the U.S. Federal Reserve will
maintain a dovish monetary policy stance.
    Spot gold        was 0.2% higher at $1,903.05 per ounce by
12:03 a.m. EDT (1603 GMT) after hitting its highest since Jan. 8
at $1,912.50. U.S. gold futures        gained 0.3% to $1,903.40
per ounce.
    "Some of the economic data has been slowing down, and that's
likely to keep Treasury yields grounded, which has been the
primary driver in sending gold prices higher," said Edward Moya,
senior market analyst at OANDA.
    "The market is probably going to have to deal with a slight
rebound in the dollar here ... but we are still going to see
gold prices continue to rise and $1,950 level seems like a very
short term goal," Moya added.
    Benchmark U.S. 10-year Treasury yields held near a more-than
two week low touched on Tuesday, reducing the opportunity cost
of holding non-interest paying gold.      
    The dollar index recovered from lows, making gold expensive
for holders of other currencies.       
    Several Fed officials have reiterated their commitment to a
dovish policy stance, while Fed vice chair Richard Clarida on
Tuesday said they can curb an outbreak of inflation should it
occur without throwing recovery off track.             
    "With investors still sounding the alarm over inflation,
institutional interest in the precious metals complex is likely
to continue rising following months of outflows, providing an
offsetting force against taper fears for the time being," TD
Securities said in a note.
    Investors are now looking to U.S. gross domestic product,
jobless claims and consumer spending data this week.
    Elsewhere, palladium        fell 0.6% to $2,753.83 per
ounce, silver        eased 0.5% to $27.84 per ounce and platinum
       rose 0.5% to $1,197.69 per ounce.

 (Reporting by Sumita Layek in Bengaluru; Editing by Kirsten
Donovan and Will Dunham)