* Dollar at an almost two-week low
* Strong U.S. data lifts stocks to record highs (Adds comments; updates prices)
By Diptendu Lahiri
April 6 (Reuters) - Gold prices climbed to their highest in more than a week on Tuesday as a weaker dollar and a drop in U.S. bond yields boosted demand for the metal.
Spot gold XAU= was up 0.1% at $1,730.46 an ounce by 0703 GMT after touching its highest since March 25 at $1,737.35.
U.S. gold futures GCcv1 rose 0.1% to $1,731.10.
"The strong U.S. economic data have eased concerns and have softened the dollar as a safe-haven asset, and gold is being supported because of that," said Michael McCarthy, chief market strategist at CMC Markets.
The dollar .DXY slumped to an almost two-week low against a basket of rival currencies, making gold cheaper for buyers outside the United States. USD/
Benchmark U.S. Treasury yields slipped, moving further away from a 14-month peak hit last week, reducing the opportunity cost of holding non-yielding gold. US/
Better than expected recent economic readings out of the United States, meanwhile, have lifted hopes of swift recovery and drove investors towards riskier assets. MKTS/GLOB
"Gold has formed a short-term double bottom but needs to break above $1,750 before it can head higher," Stephen Innes, chief global market strategist at financial services firm Axi, said in a note.
"The metal could struggle to extend last week's recovery with the positive U.S. non-farm payroll data underpinning risk-on sentiment."
The U.S. economic outlook is brightening, Cleveland Federal Reserve Bank President Loretta Mester said on Monday, adding that the Federal Reserve should stick to its easy monetary policy to help to support growth further. coordinated approach of central banks has kept gold supported for quite some time and that's what we are also seeing today," CMC's McCarthy said.
Elsewhere, silver XAG= fell 0.1% to $24.88 an ounce while palladium XPD= rose 0.3% to $2,671.97 and platinum XPT= edged 0.1% down to $1,207.43.