(New throughout, adds comments, updates prices)
* Dollar's upside likely to be short-lived- analyst
* Interactive graphic tracking global spread of coronavirus:
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By Shreyansi Singh
Jan 7 (Reuters) - Gold eased on Thursday on a stronger
dollar and higher U.S. Treasury yields, but prospects of more
fiscal stimulus under a Democrat-led administration in
Washington capped losses.
Spot gold was down 0.3% to $1,912.86 per ounce by
10:39 a.m. EST (1539 GMT). U.S. gold futures were up 0.3%
at $1,913.90.
Prices slipped as much as 2.5% after scaling their highest
since Nov. 9 on Wednesday, as 10-year U.S. Treasury yields
jumped above 1% for the first time since March.
The higher treasury yields are pulling some "flight to
safety money out of the gold market," said Bob Haberkorn, senior
market strategist at RJO Futures.
But while the stronger dollar is weighing on gold, the
greenback's upside is likely to be "short lived," he added.
The dollar index rebounded from a multi-year low, making
bullion less attractive for other currency holders.
A Democrat victory in the U.S. Senate runoffs stoked
inflation expectations as investors raised bets for more fiscal
stimulus, while the U.S. Congress certified President-elect Joe
Biden's win.
"The double Democratic win in Georgia increases expectations
of larger stimulus support and higher infrastructure spending,"
Standard Chartered Analyst Suki Cooper said, adding the
resultant higher inflation expectations would support upward
momentum in gold.
On the technical front, gold is no longer in 'overbought'
territory and $1,965 an ounce is a key resistance level, she
said, with near term support around $1,894.
The non-yielding metal is considered a hedge against
inflation and currency debasement likely to be spurred by
widespread stimulus measures.
"There's going to be more downside for the dollar, and
that's also going to be bullish for the metals," said Kitco
Metals senior analyst Jim Wyckoff.
Silver fell 0.8% to $27.08 an ounce. Platinum
was down 1.1% at $1,113.50, and palladium slipped 0.8% to
$2,418.68.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Kirsten
Donovan)
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