Jan 7 (Reuters) - Gold prices pared earlier gains on Tuesday, pressured by a strengthening dollar and Treasury yields after rising U.S. job openings signalled diminishing odds of large rate cuts by the Federal Reserve.
Spot gold was up 0.5% at $2,647.70 per ounce, as of 11:00 a.m. ET (1600 GMT), after rising as much as 1% earlier in the session. U.S. gold futures rose 0.5% to $2,661.20.
"Stronger than expected job openings along with strong services ISM all indicate that the economy is strong, but there is this lingering threat of inflation that will keep the Fed on hold perhaps through March," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
The dollar index (.DXY), opens new tab rebounded from a one-week low following data that showed a stable jobs market and a services sector that remained robust, suggesting that the Fed will likely slow the pace of its rate-cutting cycle.
Data showed that U.S. job openings unexpectedly increased in November, although hiring slowed. Job openings rose 259,000 to 8.098 million by the last day of November.
Uncertainty surrounding the tariff policy in the run up to Trump's inauguration on Jan. 20 has fuelled concerns about future moves in U.S. policy.
Investors have been pricing in a scenario where proposed tariffs could inflame U.S. inflation, limiting the Fed's ability to cut rates and thereby pressuring gold.
While bullion is considered a hedge against inflation, high rates reduce the non-yielding asset's appeal.
Traders await Friday's U.S. jobs report for policy clues, along with ADP employment and the minutes from the Fed's December meeting on Wednesday.
Meanwhile, China's central bank added gold to its reserves in December for a second straight month, official data showed.
"(China's purchase is) a development likely to lend continued support to the precious metal's price," said Ricardo Evangelista, senior analyst at ActivTrades.
Spot silver gained 0.5% to $30.09 per ounce, platinum added 1.7% to $949.23 and palladium rose 0.2% to $922.50.
Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Editing by Sharon Singleton and Tasim Zahid
