PRECIOUS-Gold firms on dollar and U.S. bond yield retreat

    * U.S. bond yields dip from 14-month highs
    * Palladium heads for best week since early November
    * Gold up more than 0.8% this week

 (Updates prices)
    By Brijesh Patel
    March 19 (Reuters) - Gold edged higher on Friday, on track
for a second consecutive weekly gain, as a slight retreat by the
dollar and U.S. Treasury yields offered support to the
safe-haven metal.
    Spot gold        was up 0.3% at $1,741.60 an ounce by 1143
GMT, with bullion up more than 0.8% over the week. U.S. gold
futures        gained 0.3% to $1,738.
    "A correction in the US 10-year Treasury yield, and indeed
in the U.S. dollar index, is offering a little bit of a lift to
gold prices, but we've been up here before around the $1,745
level and gold's found some resistance," said independent
analyst Ross Norman.
    "It doesn't feel like gold got a lot of momentum behind it
or sufficient to push it through. We might require a convincing
indication that these corrections in yield and the U.S. dollar
are more sustainable, and there's no evidence of that just now."
    The benchmark U.S. 10-year yield             eased to 1.671%
from Thursday's more than one-year peak at 1.754% while the
dollar gave up early gains.             
    The U.S. Federal Reserve this week repeated its pledge to
keep its target interest rate near zero and said it expects 
higher economic growth and inflation this year.             
    Gold is often used as a hedge against higher inflation, but
a recent spike in U.S. Treasury yields has weighed on the
non-yielding commodity.
    Palladium        dropped 2% to $2,628.84 an ounce after
rising as much as 7.3% in the previous session. The
auto-catalyst metal was on track for close to a 12% weekly jump,
its biggest since early November.
    "Volatility on the palladium market remains very high.
Though the price is trading $100 lower today, the 'risk' of
another surge in the short term is probably high," Commerzbank
analysts wrote in a note.             
    Silver        rose 0.5% to $26.18 and platinum        was
down 0.8% at $1,197.57. 

 (Reporting by Brijesh Patel in Bengaluru
Editing by Alexander Smith and David Goodman