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PRECIOUS-Gold dips as firmer U.S. dollar offsets easing bond yields

    May 14 (Reuters) - Gold edged lower on Friday, as a firmer
dollar made bullion more expensive for other currency holders,
although a pullback in the U.S. Treasury yields limited losses
for the safe-haven metal.
       
    FUNDAMENTALS
    * Spot gold        was down 0.2% at $1,823.77 per ounce by
0127 GMT. Bullion lost 0.4% so far this week.
    * U.S. gold futures        were steady at $1,823.20.
    * The dollar index        held firm near a one-week high,
and was set for a weekly gain against its rivals.       
    * Benchmark U.S. 10-year Treasury yields             slipped
from a more than one-month high hit on Thursday. Lower bond
yields reduce the opportunity cost of holding non-interest
bearing gold.      
    * Data on Thursday showed that fewer Americans filed new
claims for unemployment benefits last week, while producer
prices increased more than expected in April.             
    * Recent economic readings out of the United States have
sparked concerns over rising inflation and raised bets over an
earlier-than-expected Federal Reserve rate hike.
    * The U.S. central bank has pledged to keep interest rates
low until the economy reaches full employment, and inflation
hits 2% and is on track to "moderately" exceed that level for
some time.
    * Gold tends to benefit from lower interest rate environment
as it reduces the opportunity cost of holding non-yielding
bullion.
    * Fed Governor Christopher Waller said he expects inflation
to exceed the Fed's 2% target for the next two years, but added
that the Fed would not raise rates until it sees inflation above
target for a long time, or excessively high inflation.
            
    * Palladium        gained 0.7% to $2,883.71 per ounce, but
was on track to post a second straight weekly loss with a drop
of about 2%.
    * Silver        was flat at $27.06 per ounce, while platinum
       was up 0.6% at $1,212.88. 
            
DATA/EVENTS (GMT)
 1230  US     Retail Sales MM            April
 1315  US     Industrial Production MM   April
 1400  US     U Mich Sentiment Prelim    May

 (Reporting by Shreyansi Singh in Bengaluru, Editing by Sherry
Jacob-Phillips)
  
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