PRECIOUS-Gold flat as dollar strength counters safe-haven demand

* SHFE closed from Feb. 9-16 for Lunar New Year holidays * Israel attacks Rafah city after rejecting Hamas truce proposal * Palladium will be the harder hit due to limited uses - ANZ * Gold loses 0.3% so far this week (updates prices) By Harshit Verma Feb 9 (Reuters) - Gold prices were flat on Friday, with China markets closed for the Lunar New Year break, while a firmer U.S. dollar countered safe-haven demand fuelled by Middle East tensions. Spot gold XAU= held its ground at $2,032.70 per ounce, as of 0755 GMT. Bullion has declined 0.3% so far in the week. U.S. gold futures GCcv1 were flat at $2,048.40 per ounce. China's Shanghai Futures Exchange is closed from Feb. 9 until Feb. 16 for the Lunar New Year holidays. "Some stress in U.S. regional banks, Chinese new year demand and Middle East tensions put a floor on the metal," Hugo Pascal, a precious metals trader at InProved, said. Concerns lingered about the Middle East as Israeli forces bombed areas in the southern border city of Rafah after Prime Minister Benjamin Netanyahu rejected a Hamas truce proposal. The dollar index .DXY and 10-year Treasury yield US10YT=RR were both set for a weekly rise. USD/ US/ Focus will shift next week to a U.S. consumer price index report after Federal Reserve officials said they would hold off on cutting interest rates until they had more confidence that inflation was headed down to 2%. Traders have pared bets for a May interest rate cut in the U.S. Spot palladium prices fell below those of sister metal platinum for the first time since April 2018 on Thursday. Palladium XPD= prices fell 0.1% to $886.40 per ounce, while platinum rose 0.3% to $887.44. "Challenging supply backdrop, heavy platinum loadings and substitution away from palladium are boding well for platinum," analysts at ANZ Research wrote in a note. Both metals are used in making a key component in internal combustion engines, but platinum is also used in jewellery and other industries. Spot silver XAG= rose 0.5% to $22.68 per ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Spot gold price in USD per oz https://reut.rs/3SVNaoo Platinum-to-palladium ratio https://reut.rs/3weVJli ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Harshit Verma in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala and Sherry Jacob-Phillips) (([email protected];))