Gold steady above 4-week lows as dollar slips ahead of Janet Yellen's speech

Gold held steady on Friday above four-week lows hit in the previous session, as the dollar slipped ahead of a speech by US Federal Reserve Chair Janet Yellen that would be closely watched for cues on US 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.

"Gold prices are in the sidelines, waiting for clues from Yellen's speech," said Helen Lau, an analyst with Argonaut Securities in Hong Kong.

Spot gold was up 0.2 per cent at $1,323.81 an ounce at 0407 GMT after touching a four-week low of $1,317.46 in the previous session, and looked set to post a weekly loss of over one per cent.

US gold was up 0.2 per cent 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 US 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 US labour market," HSBC analyst James Steel said.

"If this course is taken, gold could come under pressure," added Steel.

The dollar index, which gauges the greenback against a basket of six major counterparts, edged down 0.2 per cent to 94.622.

Rising US 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 per cent to 956.59 tonnes on Thursday.

Silver was up 0.6 per cent at $18.60 an ounce after hitting an eight-week low of $18.46 on Thursday.

Platinum was 0.5 per cent higher at $1,073.74 after falling to a one-month low of $1,067.25 in the previous session. Palladium rose over one per cent to $691.97.