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PRECIOUS-Gold slips on rising Treasury yields, strong dollar

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* Benchmark U.S. 10-year Treasury yield edges higher
* Support for gold seen at $1,180-$1,183/oz- analyst (Adds quotes, updates prices) By Sethuraman N R BENGALURU, Oct 10 (Reuters) - Gold prices eased on Wednesday as U.S. Treasury yields surged, with further bearish influence from a hawkish outlook for interest rates. Spot gold fell 0.2 percent to $1,187.41 per ounce by 1415 GMT. U.S. gold futures were steady at $1,191.20 an ounce. U.S. Treasury yields advanced, holding near multi-year highs after government data showed the U.S. producer prices index (PPI) climbed in September, suggesting interest rates would be hiked at a faster pace to tame inflation. "The higher yield environment and stronger dollar are providing a toxic mix for gold," said Fawad Razaqzada, an analyst with "The trend for yields has been bullish and they could rise further from here. It will be hard for gold to sustain any rallies in this environment." Higher Treasury yields can translate into more demand for the dollar since the currency is used to buy bonds, a traditional safe haven.

This tends to dent the appeal of gold as a safe store of value and makes bullion more expensive for holders of other currencies, eroding demand. Gold has fallen over 13 percent since hitting a peak in April, with investors increasingly opting for the safety of the greenback as the U.S.-China trade war unfolded against a backdrop of rising U.S. interest rates. "Gold prices will struggle to rebound over the remainder of 2018," said Sabrin Chowdhury, commodities analyst at Fitch Solutions. "Strong U.S. economic growth, concurrent monetary policy normalisation by the U.S. Federal Reserve and a strong dollar will all limit the attractiveness of holding gold as an investment." The Fed increased interest rates last month for the third time this year and is widely expected to hike again in December, with no suggestion its tightening policy will cease any time soon. Gold has held in a $34 range for the last 1-1/2 months, propped up by limited safe-haven buying at the lower end of the range, spurred by concerns over economic growth and inflationary pressure from soaring oil prices. Analysts said the upside could be limited by waning demand due to depreciating domestic currencies in major gold-consuming countries such as India. Spot silver fell 0.7 percent to $14.29, palladium was up 0.2 percent at $1,071.60 and platinum fell 0.3 percent to $821.70 an ounce. (Reporting by Nallur Sethuraman in Bengaluru; editing by David Evans and Dale Hudson)

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