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

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US weekly jobless claims drop to over 3-year low

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Gold will not retest the old highs, analyst says

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US private payrolls fell by 32,000, jobs data on Wednesday showed

(Updates for AMERS morning hours)

By Anmol Choubey

Dec 4 (Reuters) - Gold prices were largely unchanged on Thursday as rising U.S. Treasury yields offset support from a weaker dollar, while markets awaited Friday's U.S. inflation data for clues on the Federal Reserve's policy outlook ahead of its December meeting.

Spot gold fell 0.2% to $4,195.69 per ounce, as of 1505 GMT. U.S. gold futures for February delivery were down 0.2% at $4,224.10 per ounce.

"Higher yields are keeping a bit of a cap on the upside (for gold), and providing some support is the general dollar index," said Marex analyst Edward Meir.

Benchmark 10-year U.S. Treasury yields rose 0.8%, while the U.S. dollar index hit a one-month low, making gold more affordable for overseas buyers.

Data on Thursday showed new U.S. unemployment benefit claims dropped to 191,000 last week, the lowest level in over three years and well below economists' expectations of 220,000.

Meanwhile, Wednesday's ADP report 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 over 100 economists polled by Reuters forecast the Federal Reserve will reduce its key interest rate by 25 basis points at its December 9-10 policy meeting, as the central bank seeks to support a cooling labor market.

Lower interest rates typically benefit non-yielding assets like gold.

Investors are now eyeing the September Personal Consumption Expenditures (PCE) report, the Federal Reserve's preferred inflation gauge, due Friday.

"Markets aren't going to do very much between now and next week and as far as gold is concerned, probably we will be stuck in a relatively uneventful trading range for a while," said Meir, adding gold will not retest the old highs of nearly $4,400 this year.

Meanwhile, silver fell 3.3% to $56.54 after touching a record high of $58.98 on Wednesday. The metal is up 96% this year, supported by a structural supply deficit, concerns around market liquidity and its inclusion in the U.S. critical minerals list.

Platinum lost 2.2% to $1,634.15, while palladium slid 2.1% to $1,430.38. (Reporting by Anmol Choubey in Bengaluru and Naveen Thukral in Singapore; Editing by Leroy Leo)