* Silver falls as much as 3.6% * Dollar hits an over one-week peak * Interactive graphic tracking global spread of coronavirus: tmsnrt.rs/3mvcUoa (Adds comment, updates prices) Jan 8 (Reuters) - Gold fell below the key $1,900 technical level on Friday and was on track for a weekly decline, pressured by gains in the dollar and Treasury yields ahead of U.S. nonfarm payroll data that could give further clues on the country’s economic health. Spot gold dropped 1.3% to $1,887.66 per ounce by 1239 GMT and was down 0.6% for the week. U.S. gold futures shed 1.2% to $1,890.30. “We can only see the dollar gaining from here followed by the yields, which are rising because markets are anticipating interest rates to go up on economic recovery prospects,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai. The benchmark 10-year bond yield hit a fresh high since March, helping the dollar scale an over one-week peak. Higher bond yields increase the opportunity cost of holding non-interest yielding bullion. There’s been some “big selling activity from the (gold) futures market” and “someone seems to be wanting to reduce positions ahead of the U.S. nonfarm payrolls,” due at 1330 GMT, said UBS analyst Giovanni Staunovo. Democrats’ control of the U.S. Senate has fuelled hopes of large stimulus measures, underpinning gold’s appeal as an inflation hedge. But higher inflation bets and bond yields have also bolstered Federal Reserve officials’ hopes that their new monetary policy approach is taking hold. If the Biden administration is able to push through a significant fiscal stimulus, that will push yields higher and could force the Fed to look to tighten policy earlier than expected, clobbering gold, said Michael Hewson, chief market analyst at CMC Markets UK. Elsewhere, silver fell 2.3% to $26.48 per ounce, but was on track for a fourth straight week of gains. Palladium eased 0.3 % to $2,412.97 per ounce, set for its worst week since early December. Platinum dipped 0.7% to $1,109.31, but was up 4% for the week.