Gold hovers near more than 1-month high as bond yields slip

Gold held steady near a more than one-month high on Friday, en route to its second straight weekly gain, boosted by a drop in US Treasury yields and a weaker dollar.

Spot gold was up 0.1% at $1,764.13 per ounce by 0435 GMT, after hitting its highest since Feb.26 at $1769.37 on Thursday. Bullion is up more than 1% so far this week.

US gold futures eased 0.1% to $1,764.40.

"We've seen that the 10-year yield has pulled back and has broken through that very important 1.6% level and I think that probably means that there is more weakness in yields, at least near term, which is very supportive for gold," said DailyFX currency strategist Ilya Spivak.

Benchmark US Treasury yields slipped to a one-month low, reducing the opportunity cost of holding non-interest bearing gold.

The dollar headed for its worst back-to-back weekly drop this year.

Meanwhile, data showed China's economy grew at a record pace in the first quarter, expanding 18.3% from a year earlier.

Recent economic readings from the United States and China have lifted hopes around a swift economic recovery and prompted investors to seek riskier assets.

Earlier this week, Federal Reserve Chair Jerome Powell and other Fed officials, said the brighter economic forecasts and a brief period of higher inflation will not affect monetary policy and the central bank will keep its support in place until the crisis is over.

"In the long run, some amount of inflation, due to the massive influx stimulus money, will keep gold supported," said Stephen Innes, chief global market strategist at financial services firm Axi.

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation.

Silver slipped 0.1% to $25.83 per ounce.

Palladium was steady at $2,740.18, but up about 4% for the week.

Platinum gained 0.4% to $1,197.55.