* Gold may break support at $1,198/oz - technicals
* Spot prices headed for worst week in 4 months
* Silver hits lowest since Jan. 27
By Arpan Varghese
March 10 Gold fell below the key level of $1,200
an ounce on Friday and was on track for its worst week in four
months, pressured by a stronger dollar ahead of the
closely-watched U.S. non-farm payrolls report due later in the
Spot gold was down 0.4 percent at $1,196.21 per ounce
at 0727 GMT, after touching $1,195.85 earlier in the session,
its weakest since Jan. 31.
The yellow metal has shed over 3 percent so far this week in
what could be its biggest percentage decline since the week
ended Nov. 11, 2016.
U.S. gold futures fell 0.6 percent to $1,196.1.
The dollar firmed to six-week highs against the yen as
investors awaited U.S. jobs data that is likely to reinforce
expectations of a Federal Reserve rate hike next week.
The dollar index was up 0.1 percent at 101.93.
"The precious complex has extended the overnight declines
during early Asian trade and we expect this to continue leading
into tonight's NFP (non-farm payroll) print as the USD sees
support," MKS PAMP Group trader Sam Laughlin said.
Investors are waiting for February non-farm payrolls data
as a barometer of the U.S. economy after Fed Chair Janet Yellen
said last week the central bank was poised to lift rates
provided jobs and inflation data held up.
Her comments were seen as cementing plans for an increase at
the Fed's March 14-15 meeting.
The ADP National Employment Report showed its biggest
increase in over a year in February, suggesting the economy
remains on solid ground.
The Fed will raise interest rates next week in response to a
series of strong economic data, according to all of more than
100 economists polled by Reuters.
"Gold will be under pressure going into the FOMC meeting and
hover around the $1,185-$1,190 level," said Ronald Leung, chief
dealer at Lee Cheong Gold Dealers in Hong Kong.
Higher interest rates typically pressure gold prices because
they raise the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced.
Spot gold may break a support at $1,198 per ounce and fall
into a zone of $1,187-$1,193, according to Reuters technical
analyst Wang Tao.
Meanwhile, holdings of the SPDR Gold Trust , the
world's largest gold-backed exchange-traded fund, fell 0.32
percent on Thursday.
In other precious metals, silver was down 0.6 percent
at $16.85 per ounce, after hitting its lowest since Jan. 27 at
Platinum was up 0.1 percent at $933.05 per ounce,
after touching its lowest since Jan. 4 at $928.5.
Palladium fell 0.3 percent to $744.60 per ounce.
(Reporting by Arpan Varghese in Bengaluru; Editing by Joseph
Radford and Subhranshu Sahu)