August 25, 2017 / 10:09 AM / a year ago

PRECIOUS-Gold rises after Yellen speech; investors await Draghi

    * Fed's Yellen makes no mention of monetary policy
    * ECB's Draghi to speak at 1900 GMT
    * Spot palladium falls from 16-1/2-year high
    * GRAPHIC-2017 asset returns:

 (Rewrites throughout to include Yellen's speech, updates
prices; adds comment, second byline, NEW YORK dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/JOHANNESBURG, Aug 25 (Reuters) - Gold firmed on
Friday after U.S. Federal Reserve Chair Janet Yellen made no
mention of monetary policy in her much-anticipated speech, while
investors awaited clues from European Central Bank President
Mario Draghi.
    U.S. short-term interest rate futures rose slightly,
reflecting reduced expectations that the Fed will raise interest
rates further this year, after Yellen skipped mention of it when
speaking in Jackson Hole, Wyoming.             
    "That relieved the market of a little bit of concern about
that," said Bill O'Neill, partner with Logic Advisors in Saddle
River, New Jersey, adding this was positive for gold prices and
pressured the dollar.       
    "She clearly came off dovish, saying maybe we need a few
changes in bank regulation, but they should be modest."
    Gold is highly sensitive to rising interest rates, which
increase the opportunity cost of holding non-yielding bullion
while boosting the greenback.
    Draghi is scheduled to speak at the Jackson Hole central
bankers meeting at 1900 GMT.          
    Monday is a bank holiday in the United Kingdom.    
    Spot gold        was up 0.5 percent at $1,292.14 an ounce by
2:00 p.m. EST (1800 GMT) and was on track to close the week up
0.6 percent.
    U.S. gold futures         settled up 0.5 percent at
    Earlier, Dallas Fed President Robert Kaplan called for
patience on raising interest rates any further but urged speed
in reducing the Federal Reserve's balance sheet.             
    U.S. data showed home resales unexpectedly fell in July to
an 11-month low as a chronic shortage of properties boosted
prices, the latest sign that the housing market recovery was
slowing. Weekly jobless claims rose, and new orders for key
U.S.-made capital goods were better than expected in July.
    Escalating geopolitical concerns were also preventing gold
prices from retreating significantly, market participants said. 
    U.S. President Donald Trump said on Thursday that
congressional leaders could have avoided a "mess" over raising
the U.S. debt ceiling if they had taken his advice.             
    Gold is used as an alternative investment during times of
political and financial uncertainty.
    Palladium        fell 0.2 percent to $929.90 per ounce after
reaching $940.50, a 16-1/2 year high. It was on track to close
the week up 0.5 percent, its third straight weekly rise. 
    "We believe that barring short-term corrections, likely
driven by profit-taking given elevated tactical positioning, the
palladium market is fundamentally constructive over the next
couple of years," Standard Chartered said in a note, adding that
both NYMEX and industry stocks were falling. 
    Silver        rose 0.9 percent to $17.07 an ounce, while
platinum        was down 0.6 percent at $972.99 an ounce.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Edmund Blair and Lisa Von Ahn)
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