PRECIOUS-Gold slides to 9-month low as high yields, dollar dull appeal

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

(Updates prices)
By Diptendu Lahiri
March 5 (Reuters) - Gold slumped to a near nine-month low on
Friday as higher bond yields and a stronger dollar continued to
erode its appeal, with the U.S. Federal Reserve also dampening
hopes it could take steps to rein in the soaring yields.
Spot gold XAU= was down 0.2% at $1,694.50 per ounce by
1244 GMT, having touched its lowest since June 8 at $1,686.40.
It has fallen 2% this week.
U.S. gold futures GCv1 were down 0.4% at $1,694 per ounce.
U.S. 10-year rates held above 1.5%, while the dollar rose to
three-month highs. Higher bond yields boost the opportunity cost
of owning non-yielding bullion. USD/ US/
"Rise in yields is a natural consequence of recovery in
economic activities and Powell just confirmed that," said CMC
Markets UK's chief market analyst, Michael Hewson.
U.S. Federal Reserve Chair Jerome Powell renewed his promise
to keep credit loose on Thursday, saying that while the rise in
yields was "notable," he did not expect that the Fed would have
to intervene to push them down. "If we get decent payroll data that will boost yields even
more and gold might see some additional headwinds," Hewson said.
February's U.S. non-farm payrolls report is due at 1300 GMT,
with expectations 182,000 jobs were added last month after a
rise of 49,000 in January, according to a Reuters poll of
economists.
Investors have started to consider that the Fed could think
about tightening policy soon then expected, given accelerating
vaccine rollouts, another U.S. fiscal package and increasing
inflation expectations, said DailyFX currency strategist Ilya
Spivak.
Silver XAG= edged 0.2% higher to $25.35 an ounce, but
remained down 5% on the week, in what could be its weakest
performance since late November. Palladium XPD= was up 0.1% at
$2,341.73 and platinum XPT= was steady at $1,126.95.