May 6 (Reuters) - Gold rose for a second straight session on Thursday after the dollar retreated, as investors awaited U.S. economic data to gauge the Federal Reserve’s strategy on monetary support going forward.

Spot gold gained 0.5% at $1,794.80 per ounce by 1227 GMT. U.S. gold futures rose 0.7% to $1,795.90.

“Market is pricing in a ‘more distant’ probability of a Fed rate hike after clarifications on Treasury Secretary Janet Yellen’s remarks,” said Quantitative Commodity Research Analyst Peter Fertig.

Yellen said on Tuesday she saw no inflation problem brewing, downplaying earlier comments that rate increases may be needed to stop the economy overheating.

“That has been supportive for gold, with yields on long-term government bonds declining again and the dollar weakening,” Fertig added.

Focus now shifts to Friday’s U.S. monthly jobs report, which is expected to show non-farm payrolls increased by 978,000 last month.

Gold also largely held its course after the Bank of England said it would slow the pace of its bond-buying as it sharply increased its forecast for Britain’s economic growth this year. However, the central bank stressed it was not tightening monetary policy.

On the technical front, a clear break above the $1,800 level would open space for further recoveries in gold, Carlo Alberto De Casa, chief analyst at ActivTrades said in a note.

Benchmark U.S. 10-year Treasury yields were subdued below 1.6%, reducing the opportunity cost of holding non-interest bearing gold.

The dollar index fell 0.3%, moving further away from a near two-week high hit on Wednesday.

Meanwhile, palladium fell 1.2% to $2,938.46, after scaling an all-time high of $3,017.18 on Tuesday due to a supply shortage.

Silver was up about 1% at $26.79 per ounce, while platinum dipped 1.3% to $1,240.65.