(Recasts, adds analyst comments, updates prices) * U.S. Treasury yields on track for 4th straight monthly gain * Dollar heads for best month since November 2016 * Gold set for a third consecutive monthly decline * Palladium set for best monthly gain since Feb. 2020 By Asha Sistla March 31 (Reuters) - Gold inched higher in choppy trade on Wednesday, but the metal was still headed for its worst quarterly fall since December 2016, as a surge in U.S. Treasury yields and the dollar dented safe-haven bullion"s appeal. Spot gold was up 0.1% to $1,686.65 per ounce by 0659 GMT, after hitting its lowest since March. 8 at $1,677.61 earlier in the session. It has declined about 3% this month and 11.1% during the quarter. U.S. gold futures were up 0.1% to $1,686.90 per ounce. "It"s just a technical bounce back - it"s not a trend reversal. Broad trend is on the weaker side," said Hareesh V, head of commodity research at Geojit Financial Services. "All fundamentals are on the weaker side, especially strong dollar, yields, positive economic data. If gold breaks below support of $1,665, then we can see further liquidation." The dollar index hit a near five-month high against rivals and was set for its best month since November 2016. The U.S. 10-year Treasury yield held close to a 14-month peak hit in the previous session and was set for a fourth straight monthly gain. Higher returns on bonds increase the opportunity cost of holding non-yielding bullion. "The amount of stimulus coming on should drive inflation expectations higher and that should be positive for gold," OCBC Bank economist Howie Lee said. "But at the same time, they cannot be adequately absorbed by the market and it drives yields higher and bolsters sentiment, which is negative for gold." U.S. President Joe Biden is set to outline later in the dau how he intends to pay for a $3-$4 trillion infrastructure plan, after saying earlier 90% of adult Americans would be eligible for vaccination by April 19. Silver was up 0.5% to $24.13, while platinum gained 1% to $1,166. Palladium rose 1% to $2,616.18 and was on track for its best month since February 2020. (Reporting by Asha Sistla in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)