PRECIOUS-Gold notches best week in 6 months on U.S. jobs data miss

* U.S. jobs growth slows sharply in April amid labor shortages

* Silver eyes best week in over three months

* Gold could make a run towards $1,857 level -analyst

* Physical demand wanes in India due to pandemic (Updates prices)

May 7 (Reuters) - Gold jumped more than 1% en route to its best week since November after an unexpected drop in U.S. jobs growth in April hastened a retreat in the dollar and Treasury yields.

Spot gold rose 0.84% to $1,830.41 per ounce by 2:03 p.m EDT (1803 GMT) and was up 3.5% so far this week, its best since November 2020.

U.S. gold futures settled up 0.9% at $1,831.30.

With the “complete miss on the (jobs) number,” yields are going to compress and the dollar also fell, allowing gold to shoot up, said Phillip Streible, chief market strategist, Blue Line Futures in Chicago.

But gold’s rally may be short lived since next month’s jobs data could show a “blow out” number, Streible added.

April’s nonfarm payrolls rose by only 266,000 jobs, with employers likely frustrated by labor shortages as the economy reopens.

“This report at least temporarily throws some cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected,” Kitco Metals senior analyst Jim Wyckoff said in a note.

The dollar extended declines, while U.S. Treasury yields also retreated, lowering the opportunity cost of holding non-interest bearing bullion.

Gold could push towards $1,857, followed by the $1,925 resistance level, Edward Moya, senior market analyst at OANDA, said in a note.

On the physical front, demand fell in second-biggest consumer India, amid a worsening pandemic.

“Lockdown in India does not help physical demand,” StoneX analyst Rhona O’Connell said.

“But all these fundamental physical flows, while they contribute to inflexion points and corrections, are ultimately dwarfed by professional money movements.”

Palladium eased 0.7% to $2,925.15, having hitting an all-time high of $3,017.18 earlier this week.

Silver rose 0.4% to $27.41 per ounce, set for a 5.8% weekly gain. Platinum dipped 0.2% to $1,250.48. (Reporting by Arpan Varghese in Bengaluru; additional reporting by Seher Dareen; Editing by Emelia Sithole-Matarise and Steve Orlofsky)