10-year U.S. Treasury yields at 9-month peak Dollar cuts losses after Fed minutes Silver down more than 1% Bitcoin to eat into gold"s market share in 2022- Goldman Sachs Jan 5 (Reuters) - Gold prices slipped on Wednesday erasing earlier gains, as U.S. bond yields jumped after minutes from the last Federal Reserve meeting showed that the U.S. central bank may need to raise interest rates sooner than expected to curb inflation. Spot gold was last down 0.2% at $1,810.56 per ounce by 15:21 ET (2021 GMT). U.S. gold futures settled 0.6% higher at $1,825.10. "The gold market has seen a pullback off the recent highs in response to the Fed minutes. The market was already weighed upon by the expectation of a more hawkish Fed," said David Meger, director of metals trading at High Ridge Futures. "The bond yields rise is clearly weighing on the gold market. However, the underlying support of premise in this market is the ongoing inflationary pressures and virus concerns brings about a bit of a safe haven demand element." According to minutes from the Fed"s Dec. 14-15 policy meeting, Fed officials said last month that the U.S. labor market was "very tight" and it might need not just to raise interest rates sooner than expected, but also reduce asset holdings quickly. read more Fed funds futures have priced in a 80% chance of a rate hike in March following the release of the Fed minutes. read more In the wake of Fed minutes, the benchmark 10-year U.S. Treasury yields rose to their highest level since April 2021, while the dollar (.DXY) pared losses. Some investors view gold as a hedge against higher inflation, but bullion is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion. Meanwhile, Goldman Sachs said in a note that cryptocurrency bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted. read more Elsewhere, spot silver fell 1.1% to $22.78 an ounce, platinum was up 0.9% at $980.53, and palladium fell 0.6% to $1,859.30. Reporting by Kavya Guduru, Ashitha Shivaprasad in Bengaluru; Editing by Amy Caren Daniel and Shailesh Kuber