Gold eases as US bond yields strengthen with Fed meet in focus

Gold prices dipped on Monday as elevated U.S Treasury yields pressured demand for zero-yield bullion, ahead of a key U.S. Federal Reserve meeting later this week where the central bank is expected to aggressively raise its interest rates.

FUNDAMENTALS
* Spot gold was down 0.3% at $1,890.69 per ounce, as of 0053 GMT. U.S. gold futures dropped 1% to $1,893.40.

* The U.S. Fed's Federal Open Market Committee is expected to begin its two-day meeting on interest rates on May 3 and announce its decision the next day.

* Fed policymakers look set to deliver a series of aggressive interest rate hikes at least until the summer to deal with rapid inflation and surging labour costs, even as two reports on Friday showed tentative signs both may be cresting.

* Benchmark 10-year U.S. Treasury yields rose on Monday, pressuring demand for gold.

* Higher short-term U.S. interest rates and bond yields tend to increase the opportunity cost of holding bullion, which yields nothing.

* Gold prices rallied 1% on Friday after the U.S. dollar retreated, but the metal ended April slightly lower on bets of aggressive policy tightening by the U.S. central bank.

* Bullion is also seen as a safe store of value during times of economic and political crises.

* Around 100 Ukrainian civilians were evacuated from the ruined Azovstal steelworks in the city of Mariupol on Sunday, Ukrainian President Volodymyr Zelenskiy said, after the United Nations confirmed a "safe passage operation" was in progress there.

* Spot silver fell 0.4% to $22.66 per ounce, dipped 0.2% to $929.51, and palladium slid 1.7% to $2,281.99.