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Jan 22 (Reuters) - Gold eased on Friday as U.S. Treasury yields edged higher, although prices were set to post their best week in five helped by a weaker dollar and further stimulus bets.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,867.34 per ounce by 0046 GMT. On Thursday, prices hit their highest since Jan. 8 at $1,874.86. U.S. gold futures gained 0.1% to $1,867.80.

* For the week, spot gold was up 2.2%, it's biggest increase since the week of Dec. 18.

* U.S. Treasury yields on the longer end of the curve rose along with inflation expectations on Thursday as the market eyed the prospect for additional debt supply under the new U.S. administration.

* Higher yields increase the opportunity cost of holding non-yielding bullion.

* The dollar fell to an over one-week low in the previous session, making gold cheaper for holders of other currencies.

* U.S. weekly jobless claims decreased modestly last week as the pandemic continued to hammer the labor market.

* The European Central Bank reaffirmed its pledge to keep borrowing costs at record lows on Thursday to help the economy weather the pandemic.

* Silver shed 0.2% to $25.89 an ounce, but was set to register its best week in five, up 4.6% so far this week.

* Platinum was flat at $1,126.78 and was up 4.9% for the week, its best since early December.

* Palladium gained 0.1% to $2,364.41.

DATA/EVENTS (GMT) 0700 UK Retail Sales MM, YY Dec 0700 UK Retail Sales Ex-Fuel MM Dec 0815 France Markit Mfg, Serv, Comp Flash PMIs Jan 0830 Germany Markit Mfg, Serv, Comp Flash PMIs Jan 0900 EU Markit Mfg, Serv, Comp Flash PMIs Jan 0930 UK Flash Mfg, Serv, Comp PMIs Jan 1445 US Markit Mfg, Serv, Comp Flash PMIs Jan 1500 US Existing Home Sales Dec

(Reporting by Sumita Layek in Bengaluru; Editing by Krishna Chandra Eluri)

((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 8061822693; Reuters Messaging: Sumita.Layek.thomsonreuters.com@reuters.net))