PRECIOUS-Gold slides over 1% on bets hawkish Fed tilt may stem inflation

(Updates prices)

* Oil prices dip to multi-month lows

* Treasury's Yellen: Fed's job to avoid 'wage-price spiral'

By Asha Sistla

Dec 2 (Reuters) - Gold dropped over 1% to a one-month low on Thursday, as investors latched on to signs of a seemingly hawkish tilt in U.S. monetary policy that could rein in rising consumer prices in future.

Spot gold was down 1.1% at $1,764.00 per ounce by 01:57 p.m. ET (1857 GMT), after hitting its lowest since Nov. 3.

U.S. gold futures settled down 1.2% at $1,762.70.

"The Fed policy shift and the suggestion that inflation fears are going to be lessening has taken the wind out of the (gold) bull sail," said Jim Wyckoff, senior analyst at Kitco Metals, pointing to a retreat in crude oil prices that may suggest ebbing inflation pressures as well.

Gold seemed to take cues from increased bets that early interest rate hikes - translating into higher opportunity cost of holding non-yielding gold - would curb future inflation, flattening the yield curve.

While the gain in stock markets may suggest improved appetite for risk, further volatility in equities, especially amid lingering uncertainty over the Omicron coronavirus variant, may put a floor under prices of safe-haven gold, Wyckoff added.

Although Wall Street rebounded boosted by financials shares, rising cases of the virus variant globally continued to drive volatility across markets.

The prospect of a faster taper could cap the upside for bullion and boost the U.S. dollar and Treasury yields, in a further dent to gold's appeal, said Michael Hewson, chief market analyst at CMC Markets UK.

Adding to the rhetoric, U.S. Treasury Secretary Janet Yellen told the Reuters Next conference it was the Fed's job to ensure that the current run of high inflation does not evolve into a damaging and long-lasting "wage-price spiral" like in the 1970s.

Spot silver steadied at $22.31 per ounce, platinum gained 0.3% to $936.00 and palladium added 1.8% to $1,778.68. (Reporting by Asha Sistla and Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber and Krishna Chandra Eluri)

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