* Dollar gains as energy price surge drives inflation worries
* U.S. 10-year yields ease off 3-month peak
* Gold taking backseat to some other safety assets – analyst (Recasts, updates prices)
Oct 6 (Reuters) – Gold ticked up in tight trading on Wednesday on a retreat in U.S. Treasury yields, although a stronger dollar put a lid on gains for the safe-haven metal, with investors awaiting U.S. labour market data due later this week.
Spot gold was up 0.1% at $1,760.78 per ounce by 1:38 p.m. EDT (1738 GMT), reversing from an earlier session low of $1,744.84. U.S. gold futures settled up 0.1% at $1,761.8.
“Gold has taken a backseat to other safety assets, and a lot hinges on the U.S. nonfarm payrolls data, with the metal likely to move sideways until then,” said Bob Haberkorn, senior market strategist at RJO Futures.
The yield on 10-year U.S. Treasuries pulled back after hitting a more than three-month high, but remained above 1.5%.
Taking cues from surging energy prices that could spur inflation and interest rate hikes, the U.S. dollar rose, making bullion expensive for holders of other currencies, and restricting gains.
Following data showing a strong rise in U.S. private jobs in September, investors’ focus shifts to key U.S. non-farm payrolls data on Friday that is expected to shape the Federal Reserve’s tapering plan.
Xiao Fu, head of commodities markets strategy at Bank of China International, said that even if the non-farm payrolls data is not “spectacular and just in line with expectations”, some Fed members already think the condition for tapering has been fulfilled, and that is putting pressure on gold.
Reduced stimulus and higher interest rates could dull bullion’s appeal as it translates to higher opportunity cost.
While “months of continued ETF liquidations reflect the poor sentiment that is pervasive across the precious metals complex”, reasons to own gold are growing more compelling, TD Securities analysts said in a note.
Spot silver fell 0.6% to $22.52 per ounce and palladium shed 1.8% to $1,879.42. Platinum jumped 1.9% to $980.50 per ounce. (Reporting by Bharat Govind Gautam and Arundhati Sarkar in Bengaluru; Editing by Maju Samuel)