* U.S. 10-year Treasury yields hit a peak since June
* ADP’s National Employment Report due at 1215 GMT (Updates prices)
Oct 6 (Reuters) – Gold prices extended losses on Wednesday hurt by a jump in the dollar and U.S. Treasury yields ahead of U.S. non-farm payrolls data.
Spot gold fell 0.5% to $1,750.51 per ounce by 0723 GMT, while U.S. gold futures were 0.7% lower at $1,749.40.
The dollar rose towards its 2021 highs, denting gold’s appeal for those holding other currencies, and the benchmark U.S. 10-year Treasury yield hit its highest level since June.
Gold’s price momentum is skewed downward on the basis of monetary policy expectations, IG Market analyst Kyle Rodda said.
“There’s still significant signs of cost pressures in the global economy and that’s going to keep the focus on central banks and tightening policy.”
Gold is often viewed as an inflation hedge, but reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding non-interest yielding bullion.
Focus is now on Friday’s U.S. payrolls data, which is expected to show 488,000 jobs were added in September. The National Employment Report by payroll processor ADP, is due at 1215 GMT.
Gold prices will likely consolidate in a $1,745-$1,775 range, Edward Moya, a senior market analyst at brokerage OANDA, said in a note.
“Once tapering is fully priced in, financial markets will grow fixated over the risks to the 2022 outlook and that will be the green light for many investors to return to bullion.”
Chicago Fed President Charles Evans said on Tuesday he continued to believe supply bottlenecks were driving most of the recent increase in inflation and would subside. He also repeated that the central bank was close to begin reducing its monthly asset purchases.
Spot silver fell 1.1% to $22.42 per ounce, platinum slipped 1.4% to $948.02, and palladium was down 0.9% to $1,896.66. (Reporting by Eileen Soreng in Bengaluru; editing by Subhranshu Sahu and Jason Neely)