(Updates prices)
* 10-year Treasury yields hit highest since March
* Investors await progress on U.S. COVID-19 relief package
* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa
By Sumita Layek
Feb 8 (Reuters) - Gold prices edged higher on Monday, as softer U.S. jobs data cemented hopes of further fiscal stimulus and pressured the dollar, although bullion's gains were capped by higher Treasury yields.
Spot gold XAU= was up 0.2% at $1,816 per ounce by 0732 GMT. U.S. gold futures GCv1 rose 0.2% to $1,816.10.
"Markets are justifiably spooked by the very low non-farm payrolls on Friday and that has raised economic uncertainty as well as high expectations for more fiscal stimulus from the U.S., gold has responded to that," said Howie Lee, an economist at OCBC Bank.
The dollar .DXY moved further away from an over two-month peak hit on Friday, hurt by a weaker U.S. jobs data that stoked concerns of a slow recovery in the United States. USD/ limiting gold's advance was benchmark 10-year Treasury yields US10YT=RR at their highest since March last year. Higher yields increase the opportunity cost of holding non-yielding bullion. US/
Yields are "probably the biggest single headwind" for gold, Nicholas Frappell, global general manager at ABC Bullion said, adding gold remains vulnerable to the dollar, which has more room to extend its recent gains.
Investors' focus now remains on the progress of the $1.9 trillion COVID-19 relief package, which House Speaker Nancy Pelosi believes will pass before March 15 with or without bipartisan support. can rise to $1,900 levels later in 2021 as Treasury yields are capped at some stage and focus shifts to inflation expectations, OCBC's Lee said. on 10-year Treasury Inflation-Protected Securities US10YTIP=RR , which measure average annual inflation expectations for the coming decade, have jumped to 2.19%, the highest level since mid-2018. is considered a hedge against inflation and currency debasement, likely from widespread stimulus.
Among other precious metals, spot silver XAG= gained 1% to $27.08 an ounce, platinum XPT= rose 1.7% to $1,142.46 and palladium XPD= was steady at $2,338.06.