PRECIOUS-Gold hits lowest in more than 7 months as rising yields dent appeal

(Adds graphic, updates prices)
* Gold set for biggest weekly drop since end-Nov, down 2.9%
* Bitcoin rally will be headwind for gold - analyst
* Silver down 1.8% so far this week

By Sumita Layek
Feb 19 (Reuters) - Gold recouped some losses on Friday after
dropping to its lowest in more than seven months, but stayed on
course for its biggest weekly drop since end-November as rising
U.S. Treasury yields eroded the appeal of non-yielding bullion.
Spot gold XAU= was down 0.1% at $1,773 per ounce by 0815
GMT, having touched its lowest since July 2 at $1,759.29 earlier
in the session. Spot prices have declined 2.9% so far this week.
U.S. gold futures GCv1 slipped 0.1% to $1,773.20.
Prices have clawed back some lost ground after hitting
technical support at $1,760, said Hareesh V, head of commodity
research at Geojit Financial Services.
However, gold will continue to remain under pressure due to
optimism over the global economic recovery, robust economic
data, higher yields and stabilizing dollar, he
added. An unexpected rise in U.S. jobless claims despite declining
new coronavirus infections last week also failed to support
gold. Benchmark U.S. Treasury yields US10YT=RR hovered close to
a near one-year high hit earlier in the week. Higher yields
increase the opportunity cost of holding bullion, which pays no
interest.
"U.S. bond yields have been rallying quite strongly in the
last week, and there's growing momentum that they can lift
further as U.S. and global growth recovers more quickly as
vaccines roll out," said Lachlan Shaw, National Australia Bank's
head of commodity research.
The recent record surge in bitcoin BTC=BTSP is acting as a
headwind for gold, as it is challenging gold's status as a store
of wealth and portfolio diversifier, Shaw said.
Silver XAG= eased 0.5% to $26.89 an ounce, and was down
over 1.8% so far this week, its biggest weekly decline since
mid-January.
Platinum XPT= slipped 1.2% to $1,259.46, but was set to
post its third straight weekly gain, while palladium XPD= shed
0.3% to $2,345.36.

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Gold versus Treasury yields https://tmsnrt.rs/2M5bVPh
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