PRECIOUS-Gold prices under pressure on firm U.S. Treasury yields

* 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 XAU= 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 GCv1 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.
US/
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 XAG= was steady at $26.74 an ounce, while palladium
XPD= climbed 0.1% to $2,365.47. Platinum XPT= rose 0.1% to
$1,205.99.