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Gold set for best weekly gain since November as US dollar yields slack

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Gold prices were on course for their best weekly gain since last November on Friday, as investors wait for economic data that could clarify the US Federal Reserve’s shrinking policy, while a weaker dollar and Treasury yields supported the bullion.

FUNDAMENTALS

* Spot gold was flat at $ 1,820.08 an ounce at 0048 GMT. US gold futures were down 0.1% to $ 1,819.50.

* The safe haven metal has climbed 1.4% so far this week.

* The dollar weakened against a basket of currencies on Thursday to a two-month low, a day after data showed an expected increase in US consumer prices in December.

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* 10-year US Treasury yields have eased from two-year highs reached earlier in the week.

* On Thursday, Fed Governor Lael Brainard became the latest and oldest U.S. central banker to report that the Fed is preparing to start raising interest rates in March.

* Gold is considered a hedge against inflation, but the metal is very sensitive to rising US interest rates, which increases the opportunity cost of holding unproductive bullion.

* Investors are awaiting key US economic data such as retail sales, industrial production and Michigan sentiment due later today.

* U.S. producer price inflation slowed in December, as the number of Americans filing new jobless claims hit an eight-week high in the first week of January.

* Spot silver was down 0.2% to $ 23.03 an ounce, platinum was up 0.1% to $ 970.77 and palladium 0.4% to $ 1,881.12.

DATA / EVENTS (GMT) 0300 Exports and Imports from China AA Dec. 0300 China’s trade balance Dec. 0700 UK GDP estimate 3M / 3M Nov 0700 UK GDP estimate MM, YY Nov 0700 UK manufacturing output Nov 0745 France CPI (EU standard) Final MM, YY Dec 1100 EU reserve assets Total Dec 1330 Sales retail in the United States MM Dec 1415 American Industrial Production MM Dec 1500 US U Mich Sentiment Prelim Jan (Reporting by Asha Sistla in Bengaluru; editing by Sherry Jacob-Phillips)