PRECIOUS-Gold set for worst quarter since 2016-end on robust dollar, yields

(Recasts, adds analyst comments, updates prices)
* U.S. Treasury yields on track for 4th straight monthly
gain
* Dollar heads for best month since November 2016
* Gold set for a third consecutive monthly decline
* Palladium set for best monthly gain since Feb. 2020

By Asha Sistla
March 31 (Reuters) - Gold inched higher in choppy trade on
Wednesday, but the metal was still headed for its worst
quarterly fall since December 2016, as a surge in U.S. Treasury
yields and the dollar dented safe-haven bullion's appeal.
Spot gold XAU= was up 0.1% to $1,686.65 per ounce by 0659
GMT, after hitting its lowest since March. 8 at $1,677.61
earlier in the session. It has declined about 3% this month and
11.1% during the quarter.
U.S. gold futures GCv1 were up 0.1% to $1,686.90 per
ounce.
"It's just a technical bounce back - it's not a trend
reversal. Broad trend is on the weaker side," said Hareesh V,
head of commodity research at Geojit Financial Services.
"All fundamentals are on the weaker side, especially strong
dollar, yields, positive economic data. If gold breaks below
support of $1,665, then we can see further liquidation."
The dollar index .DXY hit a near five-month high against
rivals and was set for its best month since November 2016.
USD/
The U.S. 10-year Treasury yield US10YT=RR held close to a
14-month peak hit in the previous session and was set for a
fourth straight monthly gain. US/
Higher returns on bonds increase the opportunity cost of
holding non-yielding bullion.
"The amount of stimulus coming on should drive inflation
expectations higher and that should be positive for gold," OCBC
Bank economist Howie Lee said.
"But at the same time, they cannot be adequately absorbed by
the market and it drives yields higher and bolsters sentiment,
which is negative for gold."
U.S. President Joe Biden is set to outline later in the dau
how he intends to pay for a $3-$4 trillion infrastructure plan,
after saying earlier 90% of adult Americans would be eligible
for vaccination by April 19. Silver XAG= was up 0.5% to $24.13, while platinum XPT=
gained 1% to $1,166. Palladium XPD= rose 1% to $2,616.18 and
was on track for its best month since February 2020.