* Gold to struggle until Fed curbs higher yields - analyst * Fed officials emphasise on easy policy as outlook improves * U.S. Senate to begin debate on $1.9 trillion aid this week (Updates prices) By Sumita Layek March 3 (Reuters) - Gold prices slipped on Wednesday, falling for a sixth session in seven, as expectations that U.S. Treasury yields would move higher on further economic stimulus kept non-yielding bullion under pressure. Spot gold eased 0.2% to $1,734.26 per ounce by 0743 GMT, having dropped to its lowest since June 15 at $1,706.70 on Tuesday. U.S. gold futures dipped 0.1% to $1,731.70. "As long as fiscal stimulus keeps getting pumped into the U.S. economy and the Federal Reserve remains reticent about doing something to quash yields, gold prices will struggle," said IG Market analyst Kyle Rodda. Investors kept a close eye on the progress of the $1.9 trillion U.S. stimulus bill, ahead of the Senate's debate over the legislation this week. Benchmark U.S. Treasury yields have held near 1.4% levels despite coming down from a one-year high reached last week. Prices can receive a reprieve if "the Fed comes out and says that it'll control yields or we get an outbreak in inflation expectations that implies that it's going to move out of the Fed's control," Rodda said, adding that until then it's "the worst of all worlds for gold." While gold is viewed as a hedge against inflation, higher yields have of late threatened that status, since they increase the opportunity cost of holding bullion, which pays no interest. "We anticipate recent headwinds to intensify again into the second half of this year, particularly as greater U.S. stimulus raises the prospect of an earlier-than-planned Fed rate hike," UBS analysts wrote in a note. Fed officials maintain they will keep their easy money plans in place even in the face of a potential bout of inflation this spring in an economy boosted by vaccines and government spending. Silver was steady at $26.74 an ounce, while palladium climbed 0.1% to $2,365.47. Platinum rose 0.1% to $1,205.99. (Reporting by Sumita Layek in Bengaluru; Editing by Subhranshu Sahu and Ramakrishnan M.)
Our Standards: The Thomson Reuters Trust Principles.