PRECIOUS-Gold and silver extend gains on softer dollar

Feb 9 (Reuters) - Gold and silver extended gains on Monday as the dollar weakened, while investors awaited a key U.S. labour market report due later in the week to gauge the interest rate trajectory.

FUNDAMENTALS

Spot gold XAU= rose 1.4% to $5,029.09 per ounce by 0037 GMT after a near 4% climb on Friday. U.S. gold futures GCcv1 for April delivery gained 1.4% to $5,051.0 per ounce.

Spot silver XAG= was up 2.5% after a 10% gain in the previous session.

The U.S. dollar was at its lowest level since February 4, making greenback-priced metals cheaper for overseas buyers. USD/

Asian stock markets leapt higher as a resounding win for Japanese Prime Minister Sanae Takaichi whetted appetites for more reflationary policies, while there was widespread investor relief at Wall Street's last gasp rebound. MKTS/GLOB

U.S. Treasury Secretary Scott Bessent said on Sunday he would not expect the Federal Reserve to move quickly to shrink its balance sheet, even under Fed chief nominee Kevin Warsh, who has criticised the U.S. central bank's bond purchases.

San Francisco Fed President Mary Daly said on Friday she thinks one or two more interest rate cuts may be needed to counteract weakness in the labour market.

Investors are awaiting the nonfarm payrolls report for January, due on Wednesday, for more cues on the Fed's monetary policy path. The report was delayed from last week due to a four-day partial government shutdown that has now ended.

Recognition of Iran's right to enrich uranium is key for nuclear talks with the U.S. to succeed, Foreign Minister Abbas Araqchi said on Sunday. American and Iranian diplomats held indirect talks in Oman on Friday, aimed at reviving diplomacy amid a U.S. naval buildup near Iran.

Spot platinum XPT= rose 1.8% to $2,134.18 per ounce, while palladium XPD= gained 1.8% to $1,737.75.