Gold holds near two-week highs as cautious Yellen hurts dollar

BENGALURU (Reuters) - Gold held steady near two-week highs on Tuesday, benefiting from a weaker dollar, as cautious remarks by Federal Reserve chair Janet Yellen gave few indications about the timing of U.S. rate increases.

FUNDAMENTALS

* Spot gold was up 0.1 percent at $1,245.76 per ounce by 0057 GMT. It reached a high of $1,246.21, within sight of $1,250.76 last touched on May 24.

* U.S. gold rose 0.1 percent at $1,248.50

* Yellen on Monday gave a largely upbeat assessment of the U.S. economic outlook and said interest rate hikes are coming but, in an omission that stood out to some investors, gave little sense of when.

* Two more top U.S. central bankers on Monday joined a chorus of policymakers all but dismissing the possibility of an interest rate hike next week, but professing their continued belief a hike soon after will be possible.

* The Fed said on Monday that its index on labour market conditions fell to its lowest since May 2009, reinforcing a perception of slowing job growth following last week's stunningly weak payrolls report.

* The dollar index, which tracks the U.S. currency against a basket of six major rivals, nudged up 0.1 percent to 93.959 , but it remained within sight of its overnight low of 93.745, its weakest level since May 11.

* Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 881.15 tonnes on Monday. [GOL/ETF]

* South Africa's Northam Platinum suspended production at its Zondereinde mine after a worker was stabbed to death there during a fight between members of two different unions, the company said on Monday.

* A weaker economy in Kyrgyzstan is to blame for the Central Asian state "turning up the heat" on Centerra Gold Inc in recent weeks as the country guns for a bigger slice of the miner's profits, Centerra's chief executive said on Monday.

* For the top stories on metals and other news, click [TOP/MTL] or [GOL]

MARKET REPORT

* Asian shares hit a five-week high on Tuesday as MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, while Japan's Nikkei average <.N225> firmed 0.2 percent. [MKTS/GLOB]

(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Ed Davies)