PRECIOUS-Gold slips to over 2-month low on rising yields, dollar

* Platinum prices fall more than 2%
* Dollar hits more than one-week high

(Updates prices)
By K. Sathya Narayanan
Feb 17 (Reuters) - Gold extended its slide to a fifth
session on Wednesday, dipping to its lowest in more than two
months as bets for an economic recovery boosted the dollar and
benchmark U.S. Treasury yields.
Spot gold XAU= was down 1.2% at $1,773.72 per ounce by
02:16 p.m. EST (1916 GMT), having hit its lowest since Nov. 30
at $1,768.60 earlier.
U.S. gold futures GCv1 settled down 1.5% at $1,772.80.
"The U.S. economy is expected to slowly recover," said David
Meger, director of metals trading at High Ridge Futures.
Optimism over gaining the upper hand over the coronavirus is
being shown in a slightly firmer dollar and in the 10-year
yields, which rose to their highest since February 2020, Meger
added.
Growing optimism for a $1.9 trillion U.S. stimulus plan and
rising inflation expectations pushed up benchmark Treasury
yields US10YT=RR , which in turn lifted the dollar .DXY to a
more than one-week peak. US/ USD/
Breakeven inflation USBEI10Y=RR , a measure of expected
inflation, is at its highest since August 2014 at 2.2%.
While gold is considered an inflation hedge likely spurred
by widespread stimulus, higher yields have challenged that
status since they increase the opportunity cost of holding
non-yielding gold. But gold could come back into favour once other currencies
start to outperform the dollar later this year, said OANDA
analyst Craig Erlam.
U.S. Federal Reserve officials last month debated how to lay
the groundwork for the public to accept higher inflation, and
also the need to "stay vigilant" for signs of stress in buoyant
asset markets, according to minutes of the U.S. central bank's
Jan. 26-27 policy meeting. Auto-catalyst platinum XPT= fell 1.1% to $1,247.85 an
ounce, well below Tuesday's high of $1,336.50, a peak since
September 2014.
Palladium XPD= declined 0.4% to $2,372.62, while silver
XAG= edged 0.1% higher to $27.26.