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Gold prices slipped on Friday as a surge in U.S. Treasury yields and a stronger dollar dented demand for non-yielding metal, although bullion was heading for its first weekly rise in four.

Spot gold was down 0.5% at $1,712.50 per ounce at 11:37 a.m. ET (1637 GMT). Bullion is up 0.8% so far this week.

U.S. gold futures fell 0.7% to $1,709.60.

"Rates had slumped over the last few days as a result of a short squeeze on the Treasury market. Now with rates immediately rising back to the psychologically important 1.6% is weighing on financial conditions broadly," said TD Securities commodity strategist Daniel Ghali.

"The dollar is also tied to the shadow of the rising rates. So, in this context that's obviously not the environment where investment flows are likely to move towards gold," Ghali said, adding that he expects continued pressure on gold.

Benchmark U.S. Treasury yields rose back towards a more than one-year peak above 1.6% hit on March 5, while the dollar index jumped 0.5%.

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 1.6% to $25.67 an ounce, but was on track for its first weekly gain in four weeks. Palladium rose 1.2% to $2,372.10. Platinum eased 0.2% to $1,193.20 an ounce, but was up 5.8% for the week.