Gold steady above 4-wk lows as dollar slips ahead of Yellen speech

By Sethuraman N R (Reuters) - Gold held steady on Friday above four-week lows hit in the previous session, as the dollar slipped ahead of a speech by Federal Reserve Chair Janet Yellen that would be closely watched for directions on U.S. interest rates. Yellen is scheduled to address a meeting of central bankers in Jackson Hole, Wyoming, at 1400 GMT, after top Fed officials pushed the case for a rate hike in the past week, citing improvement in employment and inflation. "Prices have been falling for the last couple of days on uncertainty over Yellen's speech. Any signals on a rate hike would lead gold to $1,280 levels," said Hareesh V, research head at Geofin Comtrade Ltd. "If prices can breach the major support level of $1,280, they could go towards $1,200." Spot gold was up 0.2 percent at $1,323.91 an ounce at 0702 GMT, after touching a four-week low of $1,317.46 in the previous session. The metal was down over 1 percent for the week. U.S. gold was up 0.2 percent at $1,327.20 an ounce. Spot gold may break a support at $1,318 per ounce and drop more towards the next support at $1,308, as suggested by its wave pattern and a Fibonacci ratio analysis, said a Reuters market analyst for commodities and energy technicals. Data showed new orders for U.S. manufactured capital goods rose for a second straight month in July, while another report showed an unexpected drop in the number of Americans filing for unemployment benefits last week. "There is a chance that Yellen could decide that a stronger signal about near-term policy would now be appropriate in light of diminished risks globally and an improved U.S. labor market," HSBC analyst James Steel said. The dollar index, which gauges the greenback against a basket of six major counterparts, edged down 0.1 percent to 94.632. [USD/] Rising U.S. interest rates increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which gold is priced. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.19 percent to 956.59 tonnes on Thursday. [GOL/ETF] Silver was up 0.7 percent at $18.63 an ounce after hitting an 8-week low of $18.46 on Thursday. Platinum was 0.7 percent higher at $1,076 after falling to a 1-month low of $1,067.25 in the previous session. Palladium rose over 1 percent to $693.35. (Reporting By Nallur Sethuraman in Bengaluru; Editing by Richard Pullin and Subhranshu Sahu)