* 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. 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. 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.