* Dollar eyes fifth straight weekly gain * Gold down about 0.8% for the week * U.S. jobs data due at 1230 GMT (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. Federal Reserve, though a slight pullback in dollar helped the precious metal to tick higher on the day. Spot gold rose 0.3% to $1,883.31 per ounce by 1147 GMT, but was down 0.7% for the week. U.S. gold futures were up 0.4% at $1,883.50. The dollar index slipped 0.4% after hitting a fresh 20-year high, making gold less expensive for those holding other currencies. However, the U.S. currency was headed for a fifth weekly gain, while the benchmark U.S. Treasury yield held near the key 3% level. "Gold's got some pretty strong headwinds, notwithstanding serious inflation, from both the dollar index being up to multi-decade highs and the 10-year U.S. Treasury back above the 3% level," independent analyst Ross Norman 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 bullion. The 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. "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." Silver fell 0.5% to $22.40 per ounce, platinum dropped 2.6% to $955.26 and palladium was also down 2.6%, to $2,130.83. (Reporting by Eileen Soreng and Seher Dareen in Bengaluru Editing by Tomasz Janowski and Susan Fenton)
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