Gold slumped to a near nine-month low on Friday and headed for a third straight weekly decline after Federal Reserve Chair Jerome Powell disappointed investors with his view on rising yields that pushed up the dollar and bond yields.

FUNDAMENTALS

Spot gold eased 0.2% to $1,693.79 per ounce by 0055 GMT, having earlier dropped to its lowest since June 8 at $1,688.96. It was down 2.3% for the week so far.

US gold futures dropped 0.6% to $1,691.20.

Powell on Thursday repeated his pledge to keep credit loose and said although the rise in yields was "notable", he did not consider it a "disorderly" move.

The US 10-year yield topped 1.5%, while the dollar surged to three-month highs. Higher yields increase the opportunity cost of holding bullion, which pays no interest.

US jobless claims rose last week after brutal winter storms in mid-February.

The amount of gold held by exchange traded funds fell by 84.7 tonnes worth $4.6 billion in February, the World Gold Council (WGC) said.

CME Group Inc decreased margins for COMEX 100 Gold Futures contracts by 9.1%.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.4% on Thursday.

Palladium climbed 0.2% to $2,343.55. Platinum shed 1.2% to $1,113.02.