* Silver hits 15-month low, palladium weakest since June 2
* COMING UP: U.S. non-farm payrolls due at 1230 GMT
(Adds quotes, updates prices, changes dateline from BENGALURU) LONDON, July 7 (Reuters) - Gold ticked lower on Friday as a stronger U.S. dollar and higher yields weighed on the market ahead of U.S. jobs data later in the day that could give more clues about further rate increases. "Both nominal and real rates have been ticking higher and that's been putting gold under pressure," said UBS precious metals strategist Joni Teves. "But we think gold should be supported overall so we do see value around these levels." UBS has a three-month price target of $1,300. Gold has shed about 6 percent since touching a seven-month peak of $1,295.97 on June 6.
Spot gold edged down 0.3 percent to $1,221.06 per
ounce by 1036 GMT. It has dropped 1.6 percent this week and is set for its biggest weekly fall since the week of May 5.
U.S. gold futures for August delivery fell 0.2
percent to $1,220.90 per ounce. The dollar hit a seven-week high against the yen after the Bank of Japan increased its purchases of government bonds, expanding monetary policy at a time when other major central banks are moving towards tightening. U.S. Treasury yields rose on Thursday, with benchmark yields touching nearly eight-week highs. Dollar-denominated bullion typically loses value when the greenback and U.S. Treasury bond rates rise since the metal does not bear interest. The dollar could get a further boost from U.S. non-farm payrolls data at 1230 GMT which is expected to show an increase of 179,000 jobs last month, which would be a sign of labour market strength that could keep the Federal Reserve on course for a third interest rate rise this year. "We are somewhat concerned about gold's ability to hold up and see more weakness that could set in, especially if Friday's payroll number sets off another spike in U.S. yields," INTL FCStone analyst Edward Meir said in a note.
Silver fell 1.2 percent to $15.81 per ounce.
Earlier in the session, silver touched $14.86 an ounce, its lowest in 15 months, which appeared to have been driven by an accidental order, according to traders. It is down 4.2 percent on the week.
Palladium fell 0.1 percent to $833.50 per ounce after
hitting its lowest since June 2 earlier in the session.
Platinum dropped 1.1 percent to $899.60 per ounce. It
is down about 2 percent so far this week.
(Additional reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru; editing by Biju Dwarakanath and David Clarke)