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PRECIOUS-Gold faces worst week in four; silver set for weekly decline

    * Gold about to endure some "serious short-term pain"-
analyst
    * Dollar set for best week in three months
    * Silver down 1.3% for the week
    * Platinum, palladium face best week in five

 (Updates prices)
    By Sumita Layek
    Feb 5 (Reuters) - Gold gained on Friday, recovering from a
more than two-month low hit in the previous session, although
prices were set for their biggest weekly drop in four due to a
stronger dollar.
    Silver headed for its worst week in three after retreating
sharply from multi-year highs hit earlier this week when
increased retail interest had propelled prices. 
    Spot gold        rose 0.3% to $1,798.41 per ounce by 0802
GMT, after falling over 2% to their lowest since Dec. 1 on
Thursday. U.S. gold futures        gained 0.4% to $1,799.10. 
    For the week so far, gold has shed 2.1% and is on course for
its biggest decline since the week ended Jan. 8.
    "There is some technical rebound as investors think
Thursday's drop was overdone, but overall trend in gold remains
bearish on rising dollar and yields," said DailyFX strategist
Margaret Yang.
    The dollar was set for its best week in three months, while
U.S. Treasury yields rose.             
    "The economic outlook is definitely brighter with vaccines
bringing down daily COVID-19 infections, and the macro data is
improving, undermining the demand for precious metals as a store
of value," Yang said.                         
    "Gold is about to endure some serious short-term pain,"    
Jeffrey Halley, a senior market analyst at OANDA said, adding
that gold's role as an inflation hedge will return as the
economic recovery starts accelerating by late second-quarter.
    Spot silver        rose 0.7% to $26.47 an ounce, but was
down 1.3% for the week. Prices have dropped over 11% since
scaling a near eight-year peak of $30.03 on Monday.             
    "Silver's fate will be similar to gold and it can retest $22
over the next two weeks, although it'll find some support
through Biden's solar push," Halley said.
    Platinum        added 0.9% to $1,107.10 and palladium       
gained 1.1% to $2,306.85. Both metals were headed for their best
week in five.

 (Reporting by Sumita Layek in Bengaluru; Editing by Rashmi
Aich, Devika Syamnath and Uttaresh.V)
  
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