PRECIOUS-Gold gains as dollar retreats, U.S. jobs report signals slow recovery

* Gold set for biggest weekly decline in four weeks
* Palladium heads for its best week since Nov. 2020

(Updates prices)
By Eileen Soreng
Feb 5 (Reuters) - Gold rebounded above the $1,800
psychological level on Friday, helped by a retreat in the dollar
and data showing slower-than-expected growth in U.S. employment
underpinning the need for additional financial support.
Spot gold XAU= climbed 1% to $1,810.26 per ounce by 1:58
p.m. EST (1858 GMT), after falling to its lowest since Dec. 1 on
Thursday. U.S. gold futures GCv1 settled up 1.2% at $1,813.
"Gold continues to primarily take its lead from the dollar
and we expect this to remain the case in the coming sessions,"
said Suki Cooper, analyst at Standard Chartered.
"Beyond the near term, we believe the outlook remains
constructive for gold given the fiscal stimulus is likely to
result in large U.S. twin deficits."
Making gold cheaper for holders of other currencies, the
dollar .DXY retreated 0.6%. USD/
U.S. employment growth rebounded moderately in January and
job losses in the prior month were deeper than initially
thought. The U.S. House of Representatives will take up final
approval on Friday of a budget measure that would let Democrats
push the $1.9 trillion COVID-19 relief package through
Congress. Gold is considered a hedge against inflation and currency
debasement likely spurred by widespread stimulus.
For the week, however, gold is down 1.9%, its biggest
decline since the week ended Jan. 8, in part due to higher U.S.
Treasury yields, because they increase the opportunity cost of
holding non-yielding bullion.
As investors shift their focus toward the U.S. economic
outlook and eye riskier assets, gold may weaken in the short
term, said Lukman Otunuga, senior research analyst at FXTM. .N
Spot silver XAG= gained 2.2% to $26.87 per ounce, but was
down about 0.4% for the week. Prices have shed more than 10%
since scaling a multi-year peak of $30.03 on Monday, propelled
by a GameStop-style retail frenzy. Palladium XPD= gained 2.1% to $2,330.04, and was headed
for its best week since November 2020.
Platinum XPT= rose 2.2% to $1,121.58 and was on track for
the best week since December 2020.