PRECIOUS-Gold rebounds on U.S. stimulus, softer yields

* For gold, $1,760-$1,765 level a key hurdle - analyst
* Specs cut bullish positions in gold, silver - CFTC

(Adds comments; updates prices)
By Diptendu Lahiri
March 1 (Reuters) - Gold jumped over 1% on Monday as a
retreat in U.S. Treasury yields pushed investors to bullion
again as a refuge from inflation following the passage of a $1.9
trillion U.S. stimulus package.
Spot gold XAU= was up 0.8% to $1,746.46 per ounce at 1033
GMT, after rising as much as 1.5% to $1,759.53 earlier in the
session.
U.S. gold futures GCv1 rose 0.8 % to $1,742.60 per ounce.
"In today's trade, investors are simply scared of a rising
inflation due to the stimulus, which will put an awful amount of
liquidity in the market," said StoneX analyst Rhona O'Connell.
The U.S. House of Representatives approved President Joe
Biden's $1.9 trillion coronavirus relief bill early on Saturday.
Gold dropped 3% on Friday, and recorded its biggest monthly
decline since November 2016 in February due to a rise in U.S.
bond yields.
A reversal of the higher yield trend also helped gold, said
Stephen Innes, chief global market strategist at financial
services firm Axi. US/ USD/
While gold is considered a shield against inflation, higher
yields have of late threatened that status, since they translate
into higher opportunity cost of holding bullion, which pays no
return. US/
"In the short term we might see some confusion in the
market; a weak dollar due to stimulus packages might help gold
in the medium term. However, as the economy gains confidence and
positive results come out of the vaccines, gold will face some
headwinds," StoneX's O'Connell said.
On the technical front, the psychological $1,700 level is
very significant, while the $1,760-$1,765 range is an important
hurdle for gold to rise further, Axi's Innes said.
Silver XAG= rose 0.8% to $26.82 an ounce, while palladium
XPD= climbed 1.3% to $2,347.92 . Platinum XPT= gained 1.8%
to $1,209.70