PRECIOUS-Gold set to face first weekly decline in three on dollar strength

(Adds analyst comments, updates prices)
* Silver holds above more than two-month high
* Dollar holds close to over four-month peak
* Another global bond sell-off likely before mid-year - poll

By Asha Sistla
March 26 (Reuters) - Gold prices were flat on Friday, as
lower U.S. yields and worries about the global economic recovery
following a surge in COVID-19 cases across Europe countered a
rising dollar, although bullion was still on course for its
first weekly decline in three.
Spot gold XAU= was little changed at $1,727.10 per ounce
by 0745 GMT. U.S. gold futures GCv1 were up 0.1% at $1,726.30
per ounce.
"The strength of the dollar has definitely put a cap on gold
and now that Treasury yields have gone down a bit on the short
end, that's technically supposed to be positive for gold," said
Brian Lan, managing director at GoldSilver Central.
"People are just sitting around waiting to see what's going
to happen, and the capital flows will still continue to come
back to gold as a safe haven asset especially if yields come
down."
Treasury yields slipped from a more than one-year high hit
last week. Another bond market sell-off is likely in the next
three months following the recent rout in financial markets,
according to a Reuters poll. US/
Higher returns on Treasury bonds generally increase the
opportunity cost of holding non-yielding bullion.
EU leaders voiced frustration over a massive shortfall in
contracted deliveries of AstraZeneca (NASDAQ:AZN) COVID-19 vaccines, as a
third wave of infections surged across Europe. However, for the week, the metal has lost more than 1% as
the dollar hit an over four-month high on Thursday. USD/
"Better recovery unfolds so that's driving flows into U.S.
assets and pushing the dollar higher and that's what's really
weighing on gold at the moment," said IG Market analyst Kyle
Rodda. Silver XAG= rose 0.5% to $25.15, holding above an over
two-month low of $24.39 per ounce hit on Thursday.
Palladium XPD= gained 1.2% to $2,639.18 and platinum
XPT= rose 0.7% to $1,155.27.