(Updates prices)
* U.S. 10-year yields hold near one-year peak
* U.S. dollar hits 3-month peak
* SPDR gold holdings fell to 10-month low on Friday
By Nakul Iyer
March 8 (Reuters) - Gold prices slid more than 1% on Monday
to a nine-month low, as the dollar and U.S. Treasury yields kept
rising, prompting investors to dump the non-yielding metal.
Spot gold fell 1.1% to $1,681.41 per ounce by 1:47
p.m. EST (1847 GMT), after hitting its lowest since June 5 at
$1,676.10. U.S. gold futures settled 1.2% down at $1,678.
The dollar climbed to a three-month peak, while the U.S.
10-year Treasury yield held near a more than one-year high,
raising the opportunity cost of holding the non-interest bearing
metal.
"We have an economy that is recovering and inflation is
materializing; that ultimately means yields have room to move
higher," said Bart Melek, head of commodity strategies at TD
Securities, adding that gold could fall towards $1,660 from the
fallout.
Melek also noted that an unexpected jump in U.S. nonfarm
payrolls and a strong stock market were more a reflection of an
improving economy and less of "critically high" inflation.
Gold is seen as a hedge against inflation.
U.S. Congressional approval of President Joe Biden's $1.9
trillion COVID-19 relief plan failed to keep the metal afloat.
Analysts also said U.S. Federal Reserve Chair Jerome
Powell's failure to address the recent surge in U.S. yields last
week further pressured gold.
Though markets have not got much pushback from the Fed on
yields, few doubt the Fed is not going to act eventually and
with rate hikes unlikely this year, that should support gold,
said Edward Moya, senior market analyst at OANDA.
But in the near-term gold could trade between $1,650 and
$1,700, with a move below $1,650 likely to invite some selling
pressure, he added.
Reflective of sentiment, SPDR Gold Trust holdings, the
world's largest gold-backed exchange-traded fund, fell to a
10-month low on Friday.
Silver fell 0.2% to $25.14 an ounce. Palladium
fell 1% to $2,314.83, while platinum rose 1.2% to
$1,143.42.
(Reporting by Nakul Iyer in Bengaluru; Editing by Marguerita
Choy and David Gregorio)
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