(Adds graphic, updates prices)
* Gold set for biggest weekly drop since end-Nov, down 2.9%
* Bitcoin rally will be headwind for gold - analyst
* Silver down 1.8% so far this week
By Sumita Layek
Feb 19 (Reuters) - Gold recouped some losses on Friday after dropping to its lowest in more than seven months, but stayed on course for its biggest weekly drop since end-November as rising U.S. Treasury yields eroded the appeal of non-yielding bullion.
Spot gold XAU= was down 0.1% at $1,773 per ounce by 0815 GMT, having touched its lowest since July 2 at $1,759.29 earlier in the session. Spot prices have declined 2.9% so far this week. U.S. gold futures GCv1 slipped 0.1% to $1,773.20.
Prices have clawed back some lost ground after hitting technical support at $1,760, said Hareesh V, head of commodity research at Geojit Financial Services.
However, gold will continue to remain under pressure due to optimism over the global economic recovery, robust economic data, higher yields and stabilizing dollar, he added. unexpected rise in U.S. jobless claims despite declining new coronavirus infections last week also failed to support gold. U.S. Treasury yields US10YT=RR hovered close to a near one-year high hit earlier in the week. Higher yields increase the opportunity cost of holding bullion, which pays no interest.
"U.S. bond yields have been rallying quite strongly in the last week, and there's growing momentum that they can lift further as U.S. and global growth recovers more quickly as vaccines roll out," said Lachlan Shaw, National Australia Bank's head of commodity research.
The recent record surge in bitcoin BTC=BTSP is acting as a headwind for gold, as it is challenging gold's status as a store of wealth and portfolio diversifier, Shaw said. XAG= eased 0.5% to $26.89 an ounce, and was down over 1.8% so far this week, its biggest weekly decline since mid-January.
Platinum XPT= slipped 1.2% to $1,259.46, but was set to post its third straight weekly gain, while palladium XPD= shed 0.3% to $2,345.36.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Gold versus Treasury yields
https://tmsnrt.rs/2M5bVPh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>