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PRECIOUS-Gold firms on dollar retreat; set for best week in seven

* Benchmark U.S. Treasury yields hit over 1-year high

* Gold up 1.4% so far this week

* Silver on track for first weekly gain in four

* Platinum set to post biggest weekly gain in four weeks (Recasts, adds comments, updates prices)

March 12 (Reuters) - Gold prices edged higher on Friday and were on course for their best week in seven, as a slight pullback in the dollar and weakness in equity markets offset pressure from rising U.S. Treasury yields.

Spot gold was up 0.2% at $1,724.16 per ounce at 02:10 p.m. ET (1910 GMT), after falling as much as 1.4% earlier in the session. Gold is up 1.4% so far this week.

U.S. gold futures settled down 0.2% at $1,719.80.

“We’ve seen a bit of weakness in the U.S. dollar (index), it slumped from around 92 to now just over 91.6,” said Bart Melek, head of commodity strategies at TD Securities.

“There’s a little bit of risk off sentiment and I suspect the psychological level of $1,700 where people weren’t really prepared to go under generated a bit of a rebound in the gold market.”

Benchmark U.S. Treasury yields rose as high as 1.642%, a more than one-year peak. Meanwhile, the dollar index pared gains, making gold less expensive for other currency holders.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

President Joe Biden on Thursday signed his $1.9 trillion stimulus bill into law and said he was working to move the United States closer to normality by July 4.

“With physical demand providing something of a floor, we doubt that the gold price will fall below $1,600 per ounce this year,” Capital Economics analysts said in a note.

“Given our forecast for industrial metals prices to fall later this year, we wouldn’t be surprised if the price of silver fell relative to the price of gold.”

Silver fell 0.9% to $25.85 an ounce, but was on track for its first weekly gain in four weeks. Palladium rose 0.9% to $2,366.35. Platinum gained 0.5% to $1,200.41 an ounce and was up 6.3% for the week. (Reporting by Brijesh Patel in Bengaluru. Editing by David Gregorio and Mark Potter)

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