Gold eyes best week in five as US yields pull back

Gold prices firmed near a seven-week peak on Friday, on course to register their best week in five, as a retreat in US Treasury yields and the dollar lifted the metal's appeal.

Spot gold had risen 0.3% to $1,767.80 per ounce by 0945 GMT, having hit its highest since Feb. 26 at $1,769.37 on Thursday. It is up 1.4% so far this week.

US gold futures were steady at $1,767.10.

"We're seeing gold going up mostly because yields are going down and the dollar is weakening," ActivTrades Chief Analyst Carlo Alberto De Casa said.

The dollar eased against rivals, while benchmark US Treasury yields hovered near a one-month low hit in the previous session.

Gold's gains came despite US data showcasing robust retail sales and a significant drop in weekly jobless claims and a record growth in China's first-quarter GDP.

The markets are trusting the Federal Reserve to keep interest rates lower for longer, so even if inflation does jump above 2% for a few weeks or months, central bank tapering is still a bit farther and this is a pulling up bullion, De Casa said.

Easy monetary policy tends to weigh on government bond yields, increasing the appeal of non-yielding gold.

The drop in 10-year yields below the key 1.60% mark "has allowed spot gold to break above its 50-day simple moving average (SMA) for the first time since early February," FXTM Market Analyst Han Tan said in a note.

"A decisive breach of its 100-day SMA, which currently resides around the psychologically important $1,800, may just do the trick as a clarion call for gold bulls to rush back in."

Silver rose 0.4% to $25.95 per ounce, and was up 2.9% for the week. Palladium slipped 0.4% to $2,730.77, but gained 3.6% for the week. Platinum was steady at $1,193.27.