Gold prices fell on Friday as US Treasury yields and the dollar held firm, although expectations of a big US fiscal stimulus kept bullion on course for its biggest weekly gain in five.

Spot gold fell 0.9% to $1,854.02 per ounce by 1039 GMT, retreating from its highest since Jan. 8 hit on Thursday. US gold futures eased 0.5% to $1,855.90.

"The challenge for gold is it seems well supported around the $1,800 levels but the dollar seems to have pulled out of its lows and not convinced that its small recovery has run its course and that continues to be a drag (on gold)," said OANDA analyst Craig Erlam.

"Higher yields and US dollar is driving the consolidation that we're seeing in gold."

Benchmark 10-year US Treasury yields held firm above 1%, helping the dollar gain.

For the week, gold has gained 1.5% - the most since the week ended Dec. 18, as investors remained hopeful about the passage of US President Joe Biden's $1.9 trillion stimulus plan.

In other metals, platinum dipped 2.8% to $1,095.65. The auto-catalyst metal was still set to post its second consecutive weekly gain, up about 2%, after hitting its highest since Aug. 12, 2016 on Thursday.

"As a result, the price differential to gold narrowed for a time to $720 per troy ounce. The last time it was any lower was in February last year," said Commerzbank analyst Carsten Fritsch in a note.

"There was no specific trigger for the price surge. The price may have been pushed up by technical buying after it exceeded its previous high at $1,130."

Silver shed 1.8% to $25.47 an ounce, but was set to register its best week in five, up 1.5% so far. Palladium eased 0.1% to $2,360.03.