PRECIOUS-Gold slumps as rising U.S. yields, dollar dull lustre

* Gold down over 6% for the month
* U.S. consumer spending rebounds in January
* Silver set for first monthly fall in three
* Palladium, platinum set for monthly gain

(Adds comment, chart, updates prices)
By Brijesh Patel
Feb 26 (Reuters) - Gold tumbled 3% to an eight-month low on
Friday en route to its worst month since November 2016 as a
stronger dollar and elevated U.S. Treasury yields hammered
non-yielding bullion's appeal.
Spot gold XAU= was down 2.5% at $1,726.31 per ounce by
1:34 p.m. ET (1834 GMT), after touching $1,716.85, its lowest
since June 2020. Bullion is down 6.4% so far this month.
U.S. gold futures GCv1 settled 2.6% lower at $1,728.80.
"Rising 10-year yields, along with the U.S. dollar moving
higher, and we had a resurgence in risk appetite. All that was a
very bad recipe for gold," said Bart Melek, head of commodity
strategies at TD Securities. MKTS/GLOB
U.S. 10-year Treasury yields US10YT=RR held near their
highest in over a year, while the dollar index .DXY also
jumped. US/ USD/
U.S. Treasury yields have risen more than 50 basis points so
far this year, eroding gold's status as an inflation hedge since
that translates into higher opportunity costs to hold bullion.
"Gold is in trouble once more and the near-term outlook
isn't looking great," OANDA analyst Craig Erlam said in a note.
"Rising yields and now a jump in the dollar are piling the
pressure on gold and, barring a reversal in bond markets, it's
tough to envisage its fortunes improving."
Other metals were also caught in gold's slipstream, with
silver XAG= shedding 3.9% to $26.34 an ounce, poised for its
first monthly decline in three, down 2.5% so far in February.
Palladium XPD= declined 3.3% to $2,321.15, while platinum
XPT= fell 2.8% to $1,182.34. However, both auto catalyst
metals were headed for a monthly gain.
Meanwhile, January data showed U.S. consumer spending
increased by the most in seven month. While these numbers discourage some safe-haven buying "the
trillions (in stimulus) that have been printed have to get into
the system and interest rates are expected to stay low, which
should help gold and silver down the road," said Bob Haberkorn,
senior market strategist at RJO Futures.

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