PRECIOUS-Gold heads for biggest weekly drop in six months

    * Gold heads for 3.2 pct weekly loss, biggest since November
    * Demand dented by fading expectations of Le Pen victory
    * GRAPHIC-2017 asset returns:

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, May 5 (Reuters) - Gold pared gains on
Friday after data showed U.S. job growth rebounded in April and
stayed on track for its biggest weekly loss in six months as
expectations for a U.S. interest rate hike in June grew and euro
zone political risk receded. 
    The dollar        hit its lowest level in roughly six months
against the euro despite the sharp rebound in U.S. payrolls
data, which did not shake investors' bullishness toward the euro
ahead of the second round of France's presidential election.
    Spot gold        was up 0.05 percent at $1,227.89 an ounce
by 2:35 p.m. EDT (1835 GMT), but set to end the week down 3.2
percent, its biggest weekly drop since November. U.S. June gold
futures        settled down 0.14 percent at $1,226.90. 
    "The U.S. employment (data) was stronger than expected," ABN
Amro analyst Georgette Boele said. "This only put gold prices
slightly under pressure, because the U.S. dollar didn't rally."
    Gold fell to the lowest in nearly seven weeks at $1,225.20
on Thursday after the Fed played down any threats to this year's
planned rate increases, supporting forecasts of another move in
    The metal is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced.
    Concerns over a victory by far-right candidate Marine Le Pen
in the French presidential election, which drove gold lower last
month, have faded considerably. Sunday's vote is expected to
elect centrist Emmanuel Macron, whom investors favour.
    "Following six weeks of fund buying, gold was left exposed
as geo-risks faded, but the fact that ETPs have seen limited
selling appetite could be an indication that this was mostly
speculative sellers reducing longs," said Saxo Bank's head of
commodities research, Ole Hansen.
    Silver        was up 0.2 percent at $16.31 an ounce, on
track to close the week down 5.4 percent. 
    "While declining mine supply has supported silver, the
dynamic was not sufficient to take prices higher on a sustained
basis, because commercial and non-commercial demand have been
too weak," said Bank of America Merrill Lynch in a report.
    Platinum        was up 1.1 percent at $909.10 an ounce, but
on track to close the week down 4 percent. Palladium        was
1.2 percent higher at $814. The spread between platinum and
palladium was close to its narrowest in 15 years, having dipped
below $100 an ounce this week.

 (Additional reporting by Swati Verma in Bengaluru; Editing by
Edmund Blair and Lisa Shumaker)