Gold prices edged lower on Friday as a rebound in US Treasury yields and a stronger dollar weighed on the metal, although bullion is still heading for its second consecutive weekly gain.

Spot gold was down 0.1% at $1,734.59 an ounce by 10:05 a.m. EDT (1405 GMT). Gold is up more than 0.5% this week. US gold futures were up 0.3% at $1,734.20.

"The rising bond yields, along with dollar's rise from recent lows having a negative effect on gold prices," said David Meger, director of metals trading at High Ridge Futures.

"But on the other side of the coin, the expected growth prospects, continuation of the relatively low interest rate environment does bring about some fears of inflation, which is supportive for gold."

Gold is often used as a hedge against higher inflation, but a recent spike in US Treasury yields has weighed on the non-yielding commodity.

Meanwhile, the dollar index gained 0.3%, making gold more expensive for holders of other currencies.

Earlier this week, the US Federal Reserve repeated its pledge to keep its target interest rate near zero and said it expects higher economic growth and inflation this year.

"The move up in US yields this year has really weighed on the yellow metal," said Joseph Stefans, head of Trading at MKS.

"On the other hand, we have seen a resurgence in physical demand, especially over the last number of weeks, from India & Asia. This will continue to provide support for the gold market, especially on further pullbacks."

Elsewhere, palladium slipped 2.5% to $2,615.89 an ounce, but the auto-catalyst metal was on track for close to a 11% weekly jump, its biggest since early November.

Platinum dropped 3.1% to $1,170.09 an ounce, its lowest in a week, while silver eased 0.2% to $26.