PRECIOUS-Gold ticks up from three-week lows after U.S. jobs data – Reuters

(Corrects weekly milestone in first bullet point)

* Gold set for first weekly dip in four

* Gold market more focussed on inflation risks- analyst

* U.S. 10-yr Treasury yields hit highest since March 2021

Jan 7 (Reuters) – Gold prices edged up from three-week lows on Friday after data showed U.S. jobs growth was slower than expected last month even as the Federal Reserve signalled faster rate hikes, which sent bullion on track for a weekly fall.

Spot gold was last up 0.1% at $1,791 per ounce by 10:06 ET (1506 GMT), while U.S. gold futures rose 0.1% to $1,790.50.

“With less than expected jobs added in December, but with the unemployment rate in the U.S. falling back toward a multi-year low, it was somehow a mixed report for gold,” UBS analyst Giovanni Staunovo said.

Nonfarm payrolls rose by 199,000 jobs last month amid worker shortages, lower than a forecast of 400,000, with moderate job gains expected in the near term as spiraling COVID-19 infections disrupt economic activity.

“A stronger than expected print was more likely to have pressured prices lower, but a weaker print has not significantly altered market rate hike expectations,” Standard Chartered analyst Suki Cooper said.

“The gold price reaction suggests the market is more focussed on inflation risks ahead of the FOMC meeting.”

The dollar fell 0.4%, making bullion cheap for overseas buyers.

Gold prices earlier hit a low since Dec. 16 at $1,782.10 and were set for a weekly drop of about 2%, the biggest since the week of Nov. 26, as benchmark U.S. 10-year Treasury yields touched their strongest level since March 2021.

The Fed minutes released on Wednesday showed officials had discussed shrinking the central bank’s overall asset holdings and raising rates sooner than expected to fight inflation.

The metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.

Spot silver was down 0.2% at $22.11 per ounce, platinum dropped 1.1% to $954.11 per ounce, while palladium rose 1.7% to $1,906.15 per ounce. (Reporting by Kavya Guduru in Bengaluru; Editing by Shinjini Ganguli)