PRECIOUS-Gold slides to 9-month low as Powell's remarks make yields rally

Reuters

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    * U.S. 10-year yields hold above 1.5%
    * Gold down 2% for the week so far
    * Silver on track for worst week since late-November

 (Updates prices)
    By Sumita Layek
    March 5 (Reuters) - Gold declined to a near nine-month low
on Friday and was set for a third straight weekly decline, as
the dollar and bond yields rose after Federal Reserve Chair
Jerome Powell's remarks that the rise in yields were not
"disorderly."
    Spot gold  XAU=  was steady at $1,697.60 per ounce by 0712
GMT, having earlier fallen to its lowest since June 8 at
$1,686.40. For the week so far, it is down 2%.
    U.S. gold futures  GCv1  fell 0.5% to $1,692.90.
    Powell on Thursday repeated his pledge to keep credit loose
and said although the rise in yields was "notable", he did not
believe the Fed will have to intervene to bring them down.
 urn:newsml:reuters.com:*:nL2N2L2262
    "Clearly, Powell wasn't dovish enough for markets overnight
and, in some ways, greenlighted higher U.S. yields by saying he
was comfortable with that," said OANDA senior market analyst
Jeffrey Halley.
    "All signs point to the bond tantrum continuing," Halley
said, adding it seems inevitable that gold will break below the
current levels and lodge deeper losses to the $1,600 region.
    The U.S. 10-year yields held above 1.5%, while the dollar
surged to three-month highs. Higher yields increase the
opportunity cost of holding non-interest paying
bullion. USD/  US/ 
    "Powell's remarks just reinforce the sense that the Fed is
slowly moving in the direction of acclimating markets toward
there not being substantial further policy support," said
DailyFX currency strategist Ilya Spivak.
    Markets are also starting to take into account that with the
ramp up in vaccines, another U.S. fiscal package and increasing
inflation expectations, the Fed might consider tightening sooner
than they expected, Spivak said.
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust  GLD  fell to lowest since May on
Thursday.  GOL/ETF 
    Silver  XAG=  fell 0.2% to $25.25 an ounce, and was down 5%
for the week, its worst since late-November. Palladium  XPD= 
gained 0.6% to $2,352.33 and platinum  XPT=  shed 0.5% to
$1,119.98.

 (Reporting by Sumita Layek in Bengaluru; editing by Uttaresh.V)
 ((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780,
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