* Gold gains more than 2.5% this week
* U.S. April jobs data due at 8:30 a.m. EST
* Silver eyes best week in three months
* Dollar slips to one-week low
(Adds comments, details, and updates prices)
By Brijesh Patel
May 7 (Reuters) - Gold prices on Friday hovered near a
2-1/2-month high and were on track for their best week in five
months, aided by a weaker dollar and a pullback in Treasury
yields as investors cautiously await U.S. non-farm payrolls
report due later in the day.
Spot gold was steady at $1,815.88 per ounce by 0246
GMT, after hitting its highest since Feb. 16 at $1,817.90 in the
previous session. Bullion up more than 2.5% so far this week.
U.S. gold futures were little changed at $1,816.40.
"The weaker dollar and U.S. Treasury yields dropping below
1.6% has helped gold prices to go above $1,800," Brian Lan,
managing director at dealer GoldSilver Central said.
"The U.S. jobs data is very important point ... if data
comes out really good, we can see people being more positive on
the economy and it might lead to Federal Reserve increasing the
interest rates earlier than expected, which will impact gold."
The dollar index slipped to a one-week low against
its rival, making gold less expensive for other currency
holders, while benchmark U.S. 10-year Treasury yields
hovered close to a two-week low.
Lower bond yields generally reduce the opportunity cost of
holding non-interest bearing gold.
Market participants await U.S. monthly jobs report due at
08:30 a.m. EST to gauge the Fed's strategy on monetary support
going forward. Economists expect 978,000 new U.S. jobs for
April, according to a Reuters poll.
Data on Thursday showed weekly U.S. jobless claims dropped
to a 13-month low.
The economic outlook is brightening, but more improvements
are needed before the Fed will start to scale back monetary
support, Cleveland Fed Bank President Loretta Mester said.
Elsewhere, palladium rose 0.5% to $2,960.06 per
ounce, after hitting an all-time high of $3,017.18 earlier this
week.
Silver gained 0.3% to $27.26 per ounce and was up
more than 5% this week. Platinum was steady at $1,252.24.
(Reporting by Brijesh Patel in Bengaluru, Editing by Sherry
Jacob-Phillips)
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