PRECIOUS-Gold prices firm, but set for 3rd weekly fall on Fed rate hike prospects

       * Dollar eyes fifth straight weekly gain
    * Gold down about 0.8% for the week
    * U.S. jobs data due at 1230 GMT

 (Recasts, adds comments, updates prices)
    By Eileen Soreng
    May 6 (Reuters) - Gold prices were on track for a third
straight weekly decline on Friday as investors fretted over the
prospects of aggressive rate hikes from the U.S. central bank,
though slight pullback in dollar helped the precious metal to
tick higher on the day.
    Spot gold        rose 0.2% to $1,881.17 per ounce by 917
GMT, but was down 0.8% for the week. U.S. gold futures
were up 0.4% to $1,883.30.
    The dollar index        eased 0.3% after hitting a fresh
20-year high, making gold less expensive for those holding other
currencies. However, the U.S. currency was headed for fifth
weekly gain, while the benchmark U.S. Treasury yields
            held near the key 3% level.
    As long as there are uncertainties about global growth and
inflation there could be phases where gold prices will gain
because equities are likely to stay under pressure, said Harshal
Barot, a senior research consultant for South Asia at Metals
Focus. The base case, though, is that the bullion is likely to
be under pressure, Barot said.
    European stocks headed for their worst week in two months as
investors expect bigger interest rate hikes will be needed to
rein in inflation.
    While gold is perceived as an inflation hedge, higher U.S.
interest rates lift the opportunity cost of holding zero-yield
    "Gold was unable to capitalize on Powell's less hawkish than
expected message this week, with bullion bulls aware that U.S.
rates are bound to rise anyway," Han Tan, chief market analyst
at Exinity, said.
    "Should Friday's non-farm payrolls point to a resilient U.S.
jobs market that paves the way for more Fed policy tightening,
that could strengthen the cap on gold's upside."
    The U.S. Federal Reserve on Wednesday raised its benchmark
rate by half a percentage point, the most in 22 years, but
Chairman Jerome Powell explicitly ruled out raising rates by
three-quarters of a percentage point in a coming meeting.

    Silver        fell 0.4% to $22.41 per ounce, platinum
slid 2.5% to $955.76 and palladium        dropped 2.4% to

 (Reporting by Eileen Soreng in Bengaluru
Editing by Tomasz Janowski)

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