PRECIOUS-Gold, silver slump as U.S. political risks fade, yields gain

* Silver falls as much as 9.8%
* Palladium set for worst week since November
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Recasts, adds comments, updates prices)
By Shreyansi Singh
Jan 8 (Reuters) - Gold slumped more than 4% on Friday and
silver followed with a near 10% plunge as prospects for a smooth
transition of power in Washington and a jump in U.S. Treasury
yields hammered the precious complex.
Spot gold XAU= fell as low as $1,828.36 and was last down
3.6% at $1,843.06 per ounce at 2:45 p.m. EST (1945 GMT), en
route to register its worst week since November. U.S. gold
futures GCv1 settled down 4.1% to $1,835.40.
"Gold is having a major fundamental shift for many investors
and they're starting to abandon their safe haven trade," said
Edward Moya, senior market analyst at OANDA.
"You're probably going to see that the Treasury market sees
some strong flows and that's taking away some of the appeal from
gold."
Democrat control of the U.S. Senate has raised bets for
large stimulus, lifting the benchmark 10-year bond yield
US10YT=RR to its highest since March. Since U.S. President Donald Trump has agreed to an orderly
transition of power, there's been some "temporary
profit-taking," said Jeffrey Sica, founder of Circle Squared
Alternative Investments. US/ "Once gold broke below $1,900, some of the momentum traders
continued to execute sell orders."
While gold has generally been seen as a hedge against the
inflation that could result from widespread stimulus, especially
last year, that has changed as higher bond yields increase the
opportunity cost of holding non-interest yielding bullion. US/
"We're going to see a lot more of stimulus and that
ultimately moved interest rates higher," said Bart Melek, head
of commodity strategies at TD Securities.
Some analysts also said a few investors could have also
diverted funds to Bitcoin, which has extended a meteoric rally.
Silver XAG= slid 7.3% at $25.14 per ounce, after falling
as much as 9.8%, while palladium XPD= eased 2.6% to $2,356.23
per ounce. Both metals were set to face their worst week since
November.
Platinum XPT= dipped 5% to $1,060.87, paring an earlier
6.2% drop.