PRECIOUS-Gold inches lower as rising yields, stronger dollar weigh

* Gold lacks short-term catalyst to drive prices
higher-analyst
* Gold on track for second straight weekly gain, up 0.7% so
far
* 10-year Treasury yields hit highest since March
* Investors await U.S. non-farm payrolls data
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Updates prices, adds graphic)
By Sumita Layek
Jan 8 (Reuters) - Gold eased on Friday as the U.S. dollar
and Treasury yields firmed, although hopes for additional
stimulus in the world's largest economy kept bullion on course
for a second straight weekly gain.
Spot gold XAU= was down 0.1% to $1,910.96 per ounce by
0719 GMT, but was up 0.7% so far this week. U.S. gold futures
GCv1 shed 0.3% to $1,908.30.
"In the short term, we just seem to lack a catalyst to drive
prices higher," said IG Market analyst Kyle Rodda.
"The effect of (fiscal stimulus hopes) has driven up
inflation expectations, (but) we're starting to see nominal bond
yields climb as well, which is reasonably significant for gold."
The benchmark 10-year bond yield US10YT=RR scaled a fresh
high since March, holding above 1%, and helping the dollar
.DXY rebound strongly. USD/ US/
A stronger dollar makes bullion more expensive for holders
of other currencies, while higher bond yields increase the
opportunity cost of holding the non-interest yielding gold.
Democrats' control of the U.S. Senate has fuelled hopes of
large stimulus measures and boosted inflation expectations,
underpinning gold's appeal as an
inflationary-hedge. But higher inflation expectations and bond yields have also
bolstered Federal Reserve officials' hopes that the central
bank's new monetary policy approach is taking hold.
"Gold still harbours the potential to reclaim the $2,000
handle. (But) there appears to be a risk of a pullback in the
Fed's asset purchasing programme should a U.S. economic
outperformance crystallize in the latter part of the year," said
FXTM market analyst Han Tan.
"Another massive yields spike may then trigger further
unwinding of gold's recent gains."
Investors now await U.S. non-farm payrolls data due later in
the day to gauge the jobs market's health.
Silver XAG= fell 0.2% to $27.06 an ounce. Platinum XPT=
climbed 0.8% to $1,124.98, while palladium XPD= gained 0.5% to
$2,430.95.

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