(Adds analyst comments, details and 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 prices fell on Wednesday to their
lowest in more than three weeks as elevated U.S. Treasury yields
and a rising dollar kept the metal on track for its biggest
quarterly drop in over four years.
Spot gold was down 0.3% to $1,679.41 per ounce by
0438 GMT, after hitting its lowest since March. 8 at $1,677.61.
It has declined more than 3% so far this month and 11.4% during
the quarter.
U.S. gold futures were down 0.4% to $1,679.10 per
ounce on Wednesday.
"Gold looks vulnerable today and I mostly put it down to the
U.S. dollar's strength seen overnight," said OANDA senior market
analyst Jeffrey Halley.
"The dollar's rally is gaining momentum and unfortunately,
after holding its own for the past couple of weeks, gold is in
danger of invalidating its attempt to trace out a longer-term
bottom."
The dollar index rose to its highest in nearly five
months against rivals and was on track for its best month since
November 2016.
The U.S. 10-year Treasury yield held close to a
14-month peak hit in the previous session and was on track for a
fourth straight monthly gain.
Higher returns on bonds increase the opportunity cost of
holding non-yielding bullion.
"Logically speaking, the amount of stimulus coming on should
drive inflation expectations higher and that should be positive
for gold," said Howie Lee, an economist at OCBC Bank.
"But at the same time, they cannot be adequately absorbed by
the market and it drives yields higher and also bolsters
sentiment, which is negative for gold."
Next week, U.S. President Joe Biden is set to unveil a
multitrillion-dollar plan to rebuild America's infrastructure.
U.S. consumer confidence surged in March to its highest
level since the start of the pandemic, supporting views that
economic growth will accelerate in the coming
months.
Elsewhere, silver shed 0.6% to $23.87, while platinum
rose 0.3% to $1,157.76. Palladium gained 0.8% to
$2,609.48 and was on track for its best month since February
2020.
(Reporting by Asha Sistla in Bengaluru; Editing by Subhranshu
Sahu)
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