PRECIOUS-Gold set for worst week in four on strength in dollar, yields
Adds analyst comment, updates prices
By Asha Sistla
Feb 5 (Reuters) - Gold rose on Friday as the dollar retreated slightly but was set for its worst weekly dip in four as investors continued to bank on the greenback with U.S. Treasury yields also gaining.
Spot gold XAU= rose 0.5% to $1,800.60 per ounce by 1255 GMT, after falling to its lowest since Dec. 1 on Thursday. U.S. gold futures GCv1 gained 0.6% to $1,802.
"Gold came relatively close to the previous low above $1,760. So some just bought it on dips and we have a little lower dollar which is helping gold," said ABN Amro analyst Georgette Boele.
"If you get better numbers today in the U.S. employee report, Wall Street is going to be very optimistic and dollar will move up and you'd probably get a retest of those lows (in gold) we've seen last year." nL1N2KA2N2
Investors await U.S. non-farm payrolls data due at 1330 GMT.
For the week, gold has shed 2.4% so far, which would be its biggest decline since the week ended Jan. 8.
"Gold is getting clobbered," said CMC Markets UK's chief market analyst, Michael Hewson, adding higher yields in U.S. Treasuries are much more attractive than holding money in gold.
The dollar .DXY was set for its best week in three months, while U.S. Treasury yields also rose. USD/ US/
Gold's status as a hedge against inflation from widespread stimulus has been challenged by higher yields because they increase the opportunity cost of holding non-yielding bullion.
"Silver's fate will be similar to gold and it can retest $22 over the next two weeks, although it'll find some support through Biden's solar push," said Jeffrey Halley, a senior market analyst at OANDA.
Spot silver XAG= rose 0.6% to $26.45 but was down 2% this week. Prices have shed over 12% since scaling a multi-year peak of $30.03 on Monday propelled by a GameStop-style retail frenzy. nL8N2K84DQ
Platinum XPT= added 1% to $1,107.95 per ounce and palladium XPD= gained 1.1% to $2,308.18, with both metals headed for their best week in five.
(Reporting by Asha Sistla and Sumita Layek in Bengaluru; Editing by Elaine Hardcastle and Steve Orlofsky)