PRECIOUS-Gold set for first weekly fall in three on firmer dollar, yields

(Recasts, adds comment, chart, updates prices)
* Dollar holds close to over four-month peak
* SPDR Gold ETF holdings down over 140 tonnes so far this
year
* Gold trapped in range bound trade - analyst

By Brijesh Patel
March 26 (Reuters) - Gold prices eased on Friday en route
for their first weekly decline in three as a stronger dollar and
rising U.S. Treasury yields offset support from concerns over
surging coronavirus cases in Europe.
Spot gold XAU= was down 0.1% at $1,724.65 per ounce by
1225 GMT. Bullion is down 1% so far this week. U.S. gold futures
GCv1 were down 0.1% at $1,724 per ounce.
"A strengthening dollar, rising Treasury yields and outflows
on the physically gold-backed exchange-traded fund's are
definitely the headwinds right now," said Xiao Fu, head of
commodities markets strategy at Bank of China International.
"At the same time, we have rising geopolitical risks and a
third wave of the pandemic supporting gold prices as well," she
added.
The dollar index .DXY firmed near four-month peak against
its rivals. Recent better-than-expected economic readings out of
the United States lifted prospects of a strong U.S. economic
recovery and strengthened the U.S. currency. USD/ Benchmark U.S. Treasury yields edged towards a more than
one-year high hit last week, increasing the opportunity cost of
holding non-interest bearing gold. US/
"A stronger dollar and higher yields continue to spur
further liquidation primarily from the ETF community," said
Joseph Stefans, Head of Trading at MKS. "I think gold is trapped in a bit of a range here and I can
see it trading sideways over the next week or so."
The biggest gold-backed exchange traded fund, SPDR Gold
Trust HLDSPDRGT=XAU has seen outflows of more than 140 tonnes
so far this year.
Meanwhile, sentiment in wider financial markets, for most
part of the week, remained subdued as worries about new
lockdowns and a slow pace of vaccination in the euro zone
weighed on risk appetite among investors. MKTS/GLOB
Elsewhere, silver XAG= inched 0.1% lower to $24.99,
holding above an over two-month low of $24.39 per ounce hit on
Thursday.
Palladium XPD= gained 0.9% to $2,633.07 and platinum
XPT= rose 0.5% to $1,153.12.

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