Markets see 86 change of 25 bps hike by Fed in May
U.S. benchmark Treasury yields at twoweek high

April 17 Reuters Gold continued to hold above the key 2,000 level on Monday, undeterred by the previous session39;s correction, while investors assess the U.S. Federal Reserve39;s interest rate hike trajectory.

Spot gold was up 0.2 to 2,007.17 per ounce at 1055 GMT, while U.S. gold futures were 0.3 higher at 2,021.10.

Friday39;s price correction hasn39;t affected the positive trend for gold, said Carlo Alberto De Casa, external analyst at Kinesis Money, adding that despite the profittaking, the 1,9802,000 zone was promising support for the metal.

Gold dropped 2 on Friday after the dollar bounced and Fed officials flagged the need for another interest rate hike.

Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic suggested the Fed could hike another 25 basis points bp next month.

The CME FedWatch tool shows markets are pricing in a 86 chance of a 25 bp hike in May.

The U.S. producer price index PPI fell by the most in nearly three years last month, coming a day after inflation data pointed to moderation in consumer prices.

Rising interest rates reduce the appeal of nonyielding bullion.

Limiting gold39;s upward momentum, the dollar index was 0.1 higher, making bullion more expensive for overseas buyers, and benchmark Treasury yields were at their highest in two weeks.

Gold also maintains a strong correlation with real yields, and price action…