PRECIOUS-Gold scales 7-week peak as U.S. yields retreat

* Gold gains 2% so far this week
* U.S. Treasury yields hover near a one-month low
* Silver rises 3.8%, palladium gains over 5% for the week

(Updates prices)
By Sumita Layek
April 16 (Reuters) - Gold prices scaled a seven-week high on
Friday and were set for their best weekly gain since
mid-December as a pullback in U.S. Treasury yields and the
dollar lifted the metal's appeal.
Spot gold XAU= jumped 0.8% to $1,778 per ounce by 1200
GMT, having earlier hit its highest since Feb. 25 at $1,779.52.
It is up 2% so far this week.
U.S. gold futures GCv1 rose 0.7% to $1,778.60.
"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 .DXY eased against its rivals, while benchmark
U.S. bond yields hovered near a one-month low hit in the
previous session. US/ USD/
Gold's gains came despite U.S. data showing robust retail
sales and a significant drop in weekly jobless claims, as well
as record economic growth in China in the first
quarter. 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, 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 XAG= rose 1.2% to $26.18 per ounce, and was up 3.8%
for the week. Palladium XPD= climbed 1.4% to $2,780.29, and
gained over 5% for the week. Platinum XPT= gained 1.1% to
$1,206.39.