PRECIOUS-Gold buckles under firmer dollar, bond yields ahead of payroll data

* Silver falls as much as 3.6%
* Dollar hits an over one-week peak
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Adds comment, updates prices)
By Eileen Soreng
Jan 8 (Reuters) - Gold fell below the key $1,900 technical
level on Friday and was on track for a weekly decline, pressured
by gains in the dollar and Treasury yields ahead of U.S. nonfarm
payroll data that could give further clues on the country's
economic health.
Spot gold XAU= dropped 1.3% to $1,887.66 per ounce by 1239
GMT and was down 0.6% for the week. U.S. gold futures GCv1
shed 1.2% to $1,890.30.
"We can only see the dollar gaining from here followed by
the yields, which are rising because markets are anticipating
interest rates to go up on economic recovery prospects," said
Kunal Shah, head of research at Nirmal Bang Commodities in
Mumbai.
The benchmark 10-year bond yield US10YT=RR hit a fresh
high since March, helping the dollar .DXY scale an over
one-week peak. USD/ US/
Higher bond yields increase the opportunity cost of holding
non-interest yielding bullion.
There's been some "big selling activity from the (gold)
futures market" and "someone seems to be wanting to reduce
positions ahead of the U.S. nonfarm payrolls," due at 1330 GMT,
said UBS analyst Giovanni Staunovo. control of the U.S. Senate has fuelled hopes of
large stimulus measures, underpinning gold's appeal as an
inflation hedge. But higher inflation bets and bond yields have also
bolstered Federal Reserve officials' hopes that their new
monetary policy approach is taking hold.
If the Biden administration is able to push through a
significant fiscal stimulus, that will push yields higher and
could force the Fed to look to tighten policy earlier than
expected, clobbering gold, said Michael Hewson, chief market
analyst at CMC Markets UK.
Elsewhere, silver XAG= fell 2.3% to $26.48 per ounce, but
was on track for a fourth straight week of gains.
Palladium XPD= eased 0.3 % to $2,412.97 per ounce, set for
its worst week since early December.
Platinum XPT= dipped 0.7% to $1,109.31, but was up 4% for
the week.

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