(New throughout, adds comments, updates prices)
* U.S. Treasury yields on track for fourth straight monthly gain
* Dollar edges off near 5-month peak
* Gold set for a third consecutive monthly decline
* Palladium set for best monthly gain since February 2020
March 31 (Reuters) – Gold clawed back on Wednesday, boosted by a weaker dollar, but was still set for its biggest quarterly decline in more than four years as elevated U.S. bond yields dented its appeal.
Spot gold rose 0.8% to $1,698.00 per ounce by 10:42 a.m. EDT (1442 GMT), having earlier touched its lowest since March 8 at $1,677.61. U.S. gold futures gained 0.7% to $1,698.40.
Gold is down over 10% for the quarter and is on track for its worst quarterly performance since end-December 2016. It is also set for a third straight monthly decline.
“As we’ve seen bond yields stabilize and the dollar pull back off its recent highs, we have seen a little move off the lows in the gold market,” said David Meger, director of metals trading at High Ridge Futures.
The U.S. dollar edged off a near five-month peak.
The market also took note of a “very large structural stimulus plan”, Meger said, adding there is concern about inflationary pressures.
U.S. President Joe Biden will explain the funding of a $3 trillion-$4 trillion infrastructure plan, after saying 90% of adult Americans would be eligible for vaccination by April 19.
“The market is watching to see whether or not the $1,680 support level is going to hold,” said Daniel Ghali, TD Securities commodity strategist.
Bullion is seen as a hedge against inflation, but rising Treasury yields have challenged that status as they translate into a higher opportunity cost of holding bullion.
“Gold and silver markets seem to be looking beyond a third wave to focus on the projected vaccination progress, especially in the United States,” Julius Baer analyst Carsten Menke said.
Silver rose 1% to $24.25, but was down over 8% for the month.
Platinum gained 3% to $1,189.50, while palladium climbed 1.3% to $2,622.38 and was heading for its best month since February 2020. (Reporting by Shreyansi Singh and Brijesh Patel in Bengaluru; Editing by Nick Macfie)