* Dollar hits three-week high * U.S. 10-year Treasury yield rises above 1.6% (Adds comment, updates prices) June 4 (Reuters) - Gold was set for its biggest weekly decline since March on Friday, pressured by a firm dollar and upbeat U.S. data that pointed to a strengthening labor market, raising expectations for strong nonfarm payrolls data. Spot gold was little changed at $1,870.07 per ounce by 1118 GMT, after hitting its lowest since May 19 at $1,855.59 earlier in the session. U.S. gold futures traded 0.1% lower at $1,871.10 per ounce. While a stronger-than-expected U.S. jobless claims data has already raised concerns about early tapering by the Federal Reserve, much really hinges on Friday’s job figures, as “gold has been building up for a correction for quite a long time now”, said Ole Hansen, head of commodity strategy at Saxo Bank.