* Gold up more than 1% this week * Dollar set for back-to-back weekly losses * World stocks near record highs on recovery hopes (Updates prices) By Diptendu Lahiri April 16 (Reuters) - Gold prices held steady near their highest since late-February on Friday, en route to their second straight weekly gain, boosted by a drop in U.S. Treasury yields and a weaker dollar. Spot gold was flat at $1,762.70 per ounce by 0740 GMT, after hitting its highest since Feb. 26 at $1,769.37 on Thursday. Bullion is up more than 1% so far this week. U.S. gold futures eased 0.1% to $1,763.80. "We"ve seen that the 10-year yield has pulled back and has broken through that very important 1.6% level... that probably means there is more weakness in yields, at least near term, which is very supportive for gold," said DailyFX currency strategist Ilya Spivak. Benchmark U.S. Treasury yields slipped to a one-month low, reducing the opportunity cost of holding non-interest bearing gold. The dollar headed for its worst back-to-back weekly drop this year. Meanwhile, data showed China"s economy grew at a record pace in the first quarter, expanding 18.3% from a year earlier. Recent economic readings from the United States and China lifted hopes around a swift economic recovery and prompted investors to seek riskier assets. Earlier this week, Federal Reserve Chair Jerome Powell and other Fed officials, said the brighter economic forecasts and a brief period of higher inflation will not affect monetary policy and the central bank will keep its support in place until the crisis is over. "In the long run, some amount of inflation, due to the massive influx stimulus money, will keep gold supported," said Stephen Innes, chief global market strategist at financial services firm Axi. Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation. Silver slipped 0.1% to $25.84 per ounce. Palladium was up 0.2% at $2,744.91, and gained about 4% for the week. Platinum climbed 0.4% to $1,198.04. (Reporting by Diptendu Lahiri and Brijesh Patel in Bengaluru; Editing by Shailesh Kuber)