* Gold down 1.8% this week, silver 3%
* Nonfarm payrolls rises in August; unemployment rate dips
* Platinum on track for biggest weekly decline since June
* Dollar heads for its strongest week since mid May
* Interactive graphic tracking global spread of the coronavirus: https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Diptendu Lahiri
Sept 4 (Reuters) - Gold fell on Friday, reversing course as better-than-expected U.S. employment data bolstered the dollar, putting bullion on course for a weekly decline of 1.8%.
Platinum was on track for its biggest weekly decline since June, dragged down by bullion.
Spot gold XAU= erased early gains to fall 0.2% to $1,927.04 per ounce by 1:51 p.m. EDT (1751 GMT).
U.S. gold futures GCv1 settled down 0.2% to $1,934.30 per ounce.
"Gold's correlation with the dollar has been elevated, especially over the past couple of weeks and bullion is being weighed down by the bounce in the greenback following the solid report, especially the unemployment rate," said Tai Wong, head of base and precious metals derivatives trading at BMO.
The dollar index .DXY was up 0.1%, putting it on track for its best week since mid May and making the metal expensive for holders of other currencies. USD/
Data showed nonfarm payrolls increased by 1.371 million jobs in August. The unemployment rate fell to 8.4% from 10.2% in July. this data does not change the U.S. Federal Reserve's stand on more stimulus to be pumped into the economy and its take on tolerating a higher inflation rate, keeping gold supported in the long run," said Michael Matousek, head trader at U.S. Global Investors.
The metal has gained 27% so far, helped by near-zero interest rates globally and easy monetary policy, especially from the Fed, and safe-haven demand driven by a clouded economic picture due to the coronavirus pandemic.
"This restive $1,900-$2,000 range should resolve ultimately higher especially with the Fed now officially elevating employment over inflation in the medium term. The practically permanent highly accommodative policy and intense election uncertainty will severely limit the attractiveness of USD," BMO's Wong said.
Platinum XPT= rose 0.9% to $897.61 an ounce but was on track for its biggest weekly decline since mid-June, down 3.4%.
Gold's failure to break above $2,000 and subsequent decline this week triggered a sharp retreat in platinum, sometimes dubbed "poor man's gold," Wong said.
Silver XAG= fell 0.2% to $26.57 an ounce and has shed 3% over the week, while palladium XPD= rose 1.7% to $2,324.77.