PRECIOUS-Gold slips as US yields gain the upper hand

* Biden to deliver plan costing ‘trillions’ of dollars

* Benchmark 10-year Treasury yields approach 10-month highs

* Interactive graph tracking the global spread of the coronavirus: tmsnrt.rs/3mvcUoa (New everywhere, add comments, update prices)

Jan. 12 (Reuters) – Gold eased on Tuesday in volatile trading that had seen it climb to 1% earlier as a firm dollar and rising U.S. Treasury yields outweighed the support for bets on higher inflation as Washington rolls out more stimulus.

Spot gold was 0.1% lower at $ 1,842.21 an ounce at 10:07 am EST (1507 GMT). On Monday, prices hit their lowest level since December 2. US gold futures fell 0.5% to $ 1,841.80.

“We still have the raging COVID-19 that is being offset by the deployment and research of the vaccine, in the spring maybe the worst will be over,” said Jim Wyckoff, senior analyst at Kitco Metals, adding a The dollar index rebounds again and higher yields remain a short-term negative factor for gold.

The dollar index rebounded from an almost three-year low reached last week, when benchmark 10-year US Treasury yields exceeded 1% for the first time since March.

Gold is generally viewed as a hedge against inflation and currency degradation that can result from a widespread stimulus. However, higher bond yields have recently called this status into question, as they increase the opportunity cost of holding non-performing bullion.

“There is going to be a big stimulus package that should support the gold market, it can not only stimulate demand, but also spark ideas of problematic price inflation,” Wyckoff added.

US President-elect Joe Biden has said Americans need more economic relief from the COVID-19 pandemic and that he will deliver a plan costing “trillions” of dollars.

While gold was still vulnerable in the short term to dollar gains and yields, “the macroeconomic picture is still positive for gold,” said Nicholas Frappell, global managing director of ABC Bullion.

Silver gained 1.6% to $ 25.31 an ounce. Platinum climbed 3% to $ 1,063.17, while palladium rose 0.9% to $ 2,393.52. (Reporting by Shreyansi Singh and Sumita Layek in Bengaluru; Editing by Kirsten Donovan)