March 26 (Reuters) - Gold prices were on course for a first weekly decline in three as elevated Treasury yields and a firm U.S. dollar dented safe-haven bullion's appeal even as the metal steadied on the day.
FUNDAMENTALS
* Spot gold XAU= was flat at $1,726.96 per ounce by 0126 GMT on Friday. U.S. gold futures GCv1 were steady at $1,725.50 per ounce. The metal hit a one-week low of $1,721.46 in the previous session.
* For the week, the metal has lost over 1% as the U.S. dollar climbed against a basket of major currencies, leaping over a four-month high on Thursday. USD/
* U.S. Treasury yields also jumped after the Treasury Department saw tepid interest for an auction of seven-year notes. US/
* Higher returns on Treasury bonds generally increase the opportunity cost of holding non-yielding bullion, while a strong dollar makes it expensive for non-U.S. buyers.
* Another bond market sell-off is likely in the next three months following the recent rout in financial markets, according to analysts polled by Reuters. Countries in Europe are re-enforcing COVID-19 restrictions as Germany, Europe's largest economy, saw the highest surge in coronavirus cases since January, further raising doubts about the pace of economic recovery. Gold is often considered as a safe-haven investment at times of political andd economic uncertainties.
* Asian markets are set to open higher on Friday after U.S. equities rose as investors weighed the outlook for economic growth and inflation and welcomed progress on vaccination rollouts. MKTS/GLOB
* The number of Americans filing new claims for unemployment benefits dropped to a one-year low last week. Silver XAG= rose 0.1% to $25.05, holding above an over two-month low of $24.39 per ounce hit on Thursday.
* Palladium XPD= rose 0.2% to $2,614.51 and platinum XPT= fell 0.1% to $1,146.11.
DATA/EVENTS (GMT)
0700 UK
Retail Sales MM, YY, Ex-Fuel MM Feb
0900 Germany Ifo Business Climate New
March
0900 Germany Ifo Current Conditions New
March
0900 Germany Ifo Expectations New
March
1330 US
Consumption, Adjusted
Feb
1400 US
U Mich Sentiment Final
March