PRECIOUS-Gold set for second week of gains on softer dollar

(Recasts, adds comment and updates prices)

* Gold up 1.1% so far this week

* Gold could test $1,800/oz level again- analyst

* Silver set for 5th straight weekly rise

Oct 22 (Reuters) – Gold was poised for a second weekly gain on Friday, drawing support from a softer dollar which offset higher U.S. bond yields and rising expectations central banks could begin easing economic support.

Spot gold rose 0.2% to $1,786.53 per ounce by 0355 GMT. U.S. gold futures gained 0.4% to $1,788.20.

Bullion prices were en route to a second week of gains, aided by a weaker dollar which was set to decline this week. A lower dollar makes gold more attractive for buyers holding other currencies.

“While gold continues to trace out a series of higher lows and appears to be girding itself for another test of $1,800, it could struggle to maintain momentum above $1,800,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA

“When gold stages powerful rallies these days, much of the flow seems to be dominated by momentum-seeking fast money. Unfortunately for gold, that money heads for the exit door at the first sign of trouble.”

Gold has traded in a broad $1,749-$1,800 range so far this month, with a steep rally in U.S. benchmark 10-year Treasury yields limiting its upside by raising the non-interest bearing precious metal’s opportunity cost.

Atlanta U.S Federal Reserve President Raphael Bostic said he expects high inflation to persist into 2022 and the central bank should raise interest rates by the end of next year.

Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up.

“Investment flows are also moving away from gold and into Bitcoin with excitement generated from the launch of the U.S. futures-based Bitcoin ETF,” said Vincent Tie, sales manager at Singapore dealer Silver Bullion.

Spot silver rose 0.1% to $24.16 an ounce and was on track for a fifth consecutive weekly gain.

Platinum was up 0.3% at $1,052.12 an ounce and palladium gained 1.1% to $2,038.70.