* Gold hovers below Thursday's 1-month peak
* China factory gate prices rise by most in nearly 3 years
(Adds comments; updates prices)
By Diptendu Lahiri
April 9 (Reuters) - Gold prices fell on Friday as robust
economic data from China boosted hopes of a swift recovery,
although bullion was set to rise more than 1% on the week as the
U.S. dollar and Treasury yields pulled back from recent highs.
China's March factory gate prices rose at their fastest
annual pace since July 2018, beating estimates.
Spot gold fell 0.2% to $1,751.86 per ounce by 0423
GMT, having hit its highest since March 1 at $1,758.45 an ounce
on Thursday. U.S. gold futures slipped 0.3% to $1,753.40
Still, the metal has gained nearly 1.5% this week, after two
weeks of losses.
"The (falling) dollar and Treasury yields have helped gold
this week along with the Fed's dovish tone, that has been topped
with lockdowns in Europe and parts of Asia with some negative
vaccine results," said Brian Lan, managing director at dealer
"On the other side, a strong data set from the United States
have led some short-term investors to book some profits after
the metal climbed to a one-month high on Thursday."
Recent robust economic data, driven by massive stimulus
measures, has dulled safe-haven demand for bullion.
Federal Reserve Chair Jerome Powell on Thursday signalled
the central bank is nowhere near to reducing its support for the
U.S. economy and cautioned that the anticipated price increase
this year is likely to be temporary.
"The likely rise in inflation April could support gold
prices in the coming weeks, especially if it rises faster than
bond yields. In the more medium term, the rise in bond yields is
likely to put renewed pressure on gold," Fitch Solutions said in
Rising bond yields increase the opportunity cost of holding
non-interest bearing gold.
Silver fell 0.3% to $25.35. Palladium was
steady at $2,625.03. Platinum fell 0.6% to $1,222.81.
(Reporting by Diptendu Lahiri and Swati Verma in Bengaluru;
editing by Uttaresh.V and Amy Caren Daniel)