* U.S. nonfarm payrolls due at 1230 GMT
* Dollar hits three-week high
* U.S. 10-year Treasury yield rises above 1.6%
June 4 (Reuters) - Gold was set for its biggest weekly
decline since March on Friday, pressured by a firm dollar and
upbeat U.S. data that pointed to a strengthening labor market,
raising expectations for strong nonfarm payrolls data.
Spot gold was little changed at $1,870.07 per ounce
by 1118 GMT, after hitting its lowest since May 19 at $1,855.59
earlier in the session.
U.S. gold futures traded 0.1% lower at $1,871.10 per
While a stronger-than-expected U.S. jobless claims data has
already raised concerns about early tapering by the Federal
Reserve, much really hinges on Friday's job figures, as "gold
has been building up for a correction for quite a long time
now", said Ole Hansen, head of commodity strategy at Saxo Bank.
Initial claims for state unemployment benefits fell below
400,000 last week, while U.S. private employers boosted hiring
in May, data showed on Thursday
"Amid receding growth and inflation risks, we thus believe
that the demand for gold and silver as a safe haven should fade
further, leading prices lower in the medium to longer-term,"
Carsten Menke, analyst at Julius Baer said in a note.
The dollar index jumped to a three-week high, making
gold more expensive for holders of other currencies, while the
benchmark 10-year yield rose to 1.63%.
A shift to tighter policy from the Fed could cut some of
There is a risk that gold's correction could turn a bit
deeper on a strong jobs report, but if gold stays above $1,825,
then the market could view the current correction just as a mild
one within a strong uptrend, added Hansen.
Silver slipped 0.5% to $27.32 per ounce and was on
track for its biggest weekly fall since late March.
Palladium fell 0.1% to $2,836.17 and platinum
was down 0.8% at $1,147.53
(Reporting by Nishara Karuvalli Pathikkal and Arundhati Sarkar
in Bengaluru; Editing by Vinay Dwivedi)