PRECIOUS-Gold eyes best week since July on easing dollar, U.S. elections

* Dollar holds near a two-month low
* Gold up 3.9% so far this week
* FACTBOX-Who is winning the U.S. election? (Updates prices)
By Sumita Layek
Nov 6 (Reuters) - Gold rose on Friday and was set to post
its best week since July as the dollar weakened and increasing
chances of a Joe Biden victory in the U.S. presidential election
boosted hopes for a larger coronavirus relief bill.
Spot gold XAU= rose 0.2% to $1,951.51 per ounce by 1:41
p.m. EST (1841 GMT), on track for a 3.9% weekly gain, the most
since late July. U.S. gold futures GCv1 settled up 0.3% at
$1,951.70.
"A devaluation of the U.S. dollar has driven gold prices to
six-week highs, also some safe-haven demand amid the uncertainty
of the presidential elections and rising COVID cases," Kitco
Metals senior analyst Jim Wyckoff said.
"The market is factoring in a Biden victory, (which) will
lead to more government stimulus programmes and that could
introduce some problematic price inflation down the road and
also deflate the value of (the) dollar."
Gold, considered a hedge against inflation and currency
debasement, has risen 28% this year on the back of massive
global stimulus to help coronavirus-hit economies.
Making gold cheaper for holders of other currencies, the
dollar .DXY held near a two-month low. USD/
Democrat Joe Biden edged closer to the White House, while
Republican President Donald Trump falsely claimed the election
was being "stolen" from him, even as votes were still being
counted in key states. "Although the continued U.S. election uncertainty is taking
away the prospect of an immediate stimulus package, markets
believe that one would eventually be coming, and so that may be
why gold is moving up," ED&F Man Capital Markets analyst Edward
Meir said.
"We have a decent shot of getting to $2,000 an ounce by
month-end if not earlier."
Data earlier showed U.S. nonfarm payrolls increased by
638,000 jobs last month, while the unemployment rate fell to
6.9% from 7.9% in September. Silver XAG= gained 0.8% to $25.51 an ounce. Platinum
XPT= was unchanged at $893.06 and palladium XPD= jumped 4.5%
at $2,484.06.