PRECIOUS-Gold falls 1% as elevated U.S. yields, strong dollar dull appeal

* U.S. 10-year yields hold near one-year peak
* U.S. dollar hits 3-month peak
* SPDR gold holdings fell to 10-month low on Friday

(Updates prices)
By Shreyansi Singh
March 8 (Reuters) - Gold prices fell 1% on Monday, slumping
to a nine-month low as the dollar firmed and U.S. Treasury
yields remained elevated, eroding bullion's appeal.
Spot gold XAU= dropped 0.6% to $1,691.40 per ounce by 1335
GMT, after hitting its lowest since June 8 at $1,683.68 earlier
in the session. U.S. gold futures GCv1 declined 0.3% to
$1,692.60.
The dollar climbed to a more than three-month peak, while
U.S. 10-year Treasury yields held close to an over one-year
high, increasing the opportunity cost of holding gold, which
pays no interest. US/ USD/
While gold is being kept in check by the high yields and the
dollar, Commerzbank analyst Daniel Briesemann said: "We see gold
behaving like a tsunami, the water is going away at the moment
due to severe pressure, but prices will come back with even more
strength once these factors are gone."
Helping gold recoup some of its losses earlier during the
Asian session, the U.S. Senate passed President Joe Biden's $1.9
trillion COVID-19 relief plan. DailyFX strategist Margaret Yang said inflation was
definitely going to go up because of rising oil and base metal
prices, and some of the individual U.S. stimulus money may also
go into investments such as gold exchange-traded funds to hedge
against future inflation. O/R
Gold also saw some support earlier in the day, following an
attack on Saudi Arabia's oil industry on Sunday. While gold is considered a hedge against inflation likely
stemming from widespread stimulus, higher bond yields this year
have threatened that status because they translate into a higher
opportunity cost of holding bullion.
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , fell to a 10-month low on Friday.
GOL/ETF
Silver XAG= fell 0.2% to $25.13 an ounce. Palladium XPD=
dropped 0.7% to $2,322.36, while platinum XPT= rose 0.1% to
$1,130.82.