PRECIOUS-Gold steady as rising yields offset dollar weakness; PCE data eyed

Dec 5 (Reuters) - Gold prices held steady on Friday, as rising U.S. Treasury yields offset support from a weaker dollar, while markets awaited U.S. inflation data later in the day for clues into the Federal Reserve's policy outlook ahead of its meeting next week.

FUNDAMENTALS

Spot gold XAU= fell 0.1% to $4,203.89 per ounce as of 0047 GMT.

U.S. gold futures GCcv1 for December delivery lost 0.2% to $4,233.60 per ounce.

Benchmark 10-year U.S. Treasury yields US10YT=RR dipped but held at a more than two-week high, while the U.S. dollar .DXY rose but held near one-month lows. US/USD/

On Thursday, data showed new U.S. unemployment benefit claims dropped to 191,000 last week, the lowest in more than three years and well below economists' estimate of 220,000.

Meanwhile, the ADP report on Wednesday indicated U.S. private payrolls declined by 32,000 in November, marking the steepest drop in more than two and a half years.

A majority of more than 100 economists polled by Reuters forecast the Fed will reduce its key interest rate by 25 basis points at its December 9-10 meeting, as the central bank seeks to support a cooling labor market.

Investors are waiting on the delayed September Personal Consumption Expenditures (PCE) Index, the Fed's preferred inflation gauge, due later in the day, for more insight into the central bank's monetary policy path.

Lower interest rates tend to favour non-yielding assets such as gold.

Elsewhere, silver XAG= fell 0.2% to $57.02 per ounce, platinum XPT= lost 0.6% to $1,636.0, while palladium XPD= slid 0.2% to $1,445.87.