* 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. 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