Gold slips before US payrolls data, set for second weekly loss

Oct 2 (Reuters) - Gold prices eased on Friday and were on track for a second straight weekly decline, pressured by a firmer US dollar and elevated Treasury yields, while investors awaited key US payrolls data for clues on the Federal Reserve's policy path.

FUNDAMENTALS

* Spot gold fell 0.4% to $4,161.58 per ounce by 0031 GMT and was down about 3% for the week so far.

* US gold futures for December delivery lost 0.3% to $4,191.10.

* The US dollar headed for a weekly gain, making greenback-priced metals more expensive for holders of other currencies. Yields on 10- and 30-year Treasuries hit their highest levels since 2002 on Thursday. USD/ US/

* The September US nonfarm payrolls report is due at 1230 GMT.

* Two Fed policymakers this week staked out an unusually clear case for taking in more data before deciding about another rate hike.

* Data on Wednesday showed US inflation increased less than expected in August and price pressures were more moderate in the prior month than previously reported.

* Traders are pricing in only about a 25% chance of a rate hike this month, versus about 70% earlier in the week. They still see a 79% chance of a rate increase in December.

* Higher borrowing costs typically diminish gold's attractiveness, given that it pays no interest.

* New applications for US unemployment benefits drifted close to 57-year lows last week and layoffs decreased in September, suggesting labor market stability persisted.

* Iran is preparing a broader and more forceful response if the United States resumes large-scale military attacks, sources said, while continuing a diplomatic push that Iranian officials privately see as unlikely to succeed.

* Spot silver fell 0.2% to $60.71, platinum slipped 0.3% to $1,718.80 and palladium rose 0.6% to $1,177.80.