PRECIOUS-Gold hovers near 7-week peak as U.S. bond yields slip

* Gold up more than 1% this week
* Dollar set for back-to-back weekly losses
* World stocks near record highs on recovery hopes

(Updates prices)
By Diptendu Lahiri
April 16 (Reuters) - Gold prices held steady near their
highest since late-February on Friday, en route to their second
straight weekly gain, boosted by a drop in U.S. Treasury yields
and a weaker dollar.
Spot gold XAU= was flat at $1,762.70 per ounce by 0740
GMT, after hitting its highest since Feb. 26 at $1,769.37 on
Thursday. Bullion is up more than 1% so far this week.
U.S. gold futures GCv1 eased 0.1% to $1,763.80.
"We've seen that the 10-year yield has pulled back and has
broken through that very important 1.6% level... that probably
means there is more weakness in yields, at least near term,
which is very supportive for gold," said DailyFX currency
strategist Ilya Spivak.
Benchmark U.S. Treasury yields slipped to a one-month low,
reducing the opportunity cost of holding non-interest bearing
gold. The dollar .DXY headed for its worst back-to-back weekly
drop this year. US/ USD/
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
lifted hopes around a swift economic recovery and prompted
investors to seek riskier assets. MKTS/GLOB
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 XAG= slipped 0.1% to $25.84 per ounce. Palladium
XPD= was up 0.2% at $2,744.91, and gained about 4% for the
week. Platinum XPT= climbed 0.4% to $1,198.04.