* U.S. 10-year yields hold below one-year peak * Attack on Saudi's oil facilities boosts safe-haven demand * Holdings of SPDR Gold fell to 10-month low on Friday (Updates prices) By Sumita Layek March 8 (Reuters) - Gold rebounded on Monday from a nine-month low hit last week, as bond yields retreated and the passage of a massive U.S. stimulus package boosted bullion's appeal as a hedge against inflation. Spot gold rose 0.1% to $1,701.81 per ounce by 0713 GMT, after hitting its lowest since June 8 at $1,686.40 on Friday. U.S. gold futures climbed 0.1% to $1,700.90. "The market probably sold a bit too much last week on higher yields and yields seem to be plateauing a little bit right now," said Stephen Innes, chief global market strategist at financial services firm Axi. The yield on 10-year Treasury notes held below an over one-year peak hit on Friday, reducing the opportunity cost of holding the non-interest paying gold. The passing of the $1.9 trillion COVID-19 relief plan by the U.S. Senate on Saturday also provided support. "Inflation is definitely going to go up" because of rising oil and base metal prices, said DailyFX strategist Margaret Yang. Yang added that some of the individual U.S. stimulus money may also go into investments such as gold exchange-traded funds to hedge against future inflation. An attack at the heart of Saudi Arabia's oil industry on Sunday with drones and missiles from Yemen's Houthi forces is also boosting gold's safe-haven demand, analysts said. Bullion is considered a safe asset during times of financial and geopolitical uncertainty. The dollar hovered close to a three-month peak hit on Friday, making gold expensive for other currency holders. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , fell to a 10-month low on Friday. Silver rose 0.9% to $25.40 an ounce. Palladium climbed 0.2% to $2,344.07. Platinum gained 0.2% to $1,132.12. (Reporting by Sumita Layek in Bengaluru; Editing by Aditya Soni and Subhranshu Sahu)
Our Standards: The Thomson Reuters Trust Principles.