PRECIOUS-Gold falls as U.S. yields, dollar advance

* European Central Bank policy meeting due on Thursday
* More platinum deficits loom after record undersupply in
2020-WPIC

(Adds comment, updates prices)
By Sumita Layek
March 10 (Reuters) - Gold inched lower on Wednesday after
posting its biggest jump in two months in the previous session,
as firmer U.S. Treasury yields and dollar eroded the metal's
appeal.
Spot gold XAU= eased 0.1% to $1,714.55 per ounce by 0706
GMT, after rising more than 2% on Tuesday. U.S. gold futures
GCv1 fell 0.3% to $1,712.40.
"There's an element of corrective price action after a very
spirited gold rebound in the preceding 24 hours. (And) gold has
been falling largely against the backdrop of yields rising,"
said DailyFX currency strategist Ilya Spivak.
U.S. yields recovered on Wednesday, reducing the appeal of
holding gold, while the dollar also bounced back. USD/ US/
A steady rise in bond yields makes holding gold less
attractive as investors typically tend to gravitate toward
assets that generate steady income in the form of interest or
dividend.
The $1.9 trillion U.S. COVID-19 relief bill has cleared
procedural vote in the House of Representatives and is expected
to be considered and passed on Wednesday. A massive U.S stimulus, loose global monetary policy,
widespread vaccine rollouts and reopening of economies are
"potentially very inflationary and might force the Federal
Reserve to tighten policy meaningfully sooner, which would be a
really big headwind for gold," Spivak said.
Large global stimulus measures to combat the economic
fallout of the pandemic have fanned worries of higher inflation
and lifted bond yields.
The European Central Bank will discuss on Thursday the
merits of intervening to bring yields down. However, potential of physical demand recovery and U.S.
stimulus are likely to restrict a major downside in gold,
Hareesh V, head of commodity research at Geojit Financial
Services, said in a note.
Silver XAG= fell 0.6% to $25.74 an ounce. Palladium XPD=
rose 0.5% to $2,308.79, while platinum XPT= fell 0.9% to
$1,157.81.
More platinum deficits loom this year after a record
undersupply of almost a million ounces in 2020, the World
Platinum Investment Council said.