Gold gains as dollar, yields slip ahead of US weekly jobs report

Gold prices ticked up on Thursday buoyed by a softer dollar and lower Treasury yields, ahead of a weekly jobless claims report that could provide fresh clues on when the U.S. Federal Reserve would start lowering interest rates.

FUNDAMENTALS

* Spot gold rose 0.2% to $2,037.80 per ounce, as of 0218 GMT.

* U.S. gold futures rose 0.1% to $2,053.10 per ounce.

* The dollar index fell 0.1%, and yields on benchmark 10-year Treasury notes slipped to 4.0921%, making non-yielding bullion more appealing for other currency holders. * Investors will be watching out for U.S. weekly jobless claims data due at 1330 GMT after last week’s monthly non-farm payrolls report came in stronger-than-expected, showing signs of persistent strength in the labor market.

* The U.S. regional banking sector remained a concern as Moody’s downgraded New York Community Bancorp to junk citing pressure on its funding and liquidity. * The KBW regional banking index pared losses but still ended lower and is down more than 5% so far this month. * Fed officials want to hold off on cutting interest rates until they have more confidence that inflation is headed down to 2%, and gave a range of reasons for feeling little urgency to start easing policy soon or to move quickly once they do.

* Lower rates decrease the opportunity cost of holding bullion.

* China’s consumer prices extended their decline for a fourth month in January while producer prices also dropped, underscoring deflationary risks facing the world’s second-biggest economy as it struggles to mount a solid recovery.

* Spot silver rose 0.2% to $22.23 per ounce, platinum was flat at $879.59, while palladium hit a five year low, losing 0.2% to $893.31.

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