SINGAPORE, Sept 25 (Reuters) - Gold dropped from its highest in a month on Friday, giving back some of its sharp overnight gains, as the dollar rallied on an assurance from Federal Reserve chair Janet Yellen that the U.S. central bank would begin raising rates this year.
Platinum, which fell to a 6-1/2-year low this week, was on track for its biggest weekly drop since mid-July following the Volkswagen (XETRA:VOWG) emissions scandal, while palladium was set to post its biggest weekly gain in 2-1/2 years.
FUNDAMENTALS
* Spot gold XAU= fell 0.4 percent to $1,149.20 an ounce by 0043 GMT, below a one-month high of $1,156.30 reached on Thursday.
* Bullion gained 2 percent in the previous session, its biggest daily jump in eight months and was on track to post its second straight weekly gain.
* But the metal came under pressure after Yellen said late on Thursday that she and other Fed policymakers do not expect recent global economic and financial market developments to significantly affect the Fed's policy and that it would hike rates this year. ID:nL1N11U2VK
* Higher rates could dent demand for non-interest-paying gold, while boosting the dollar.
* Elsewhere, SPDR Gold Trust GLD , the world's top gold-backed exchange-traded fund, saw inflows for a third straight session. The fund's holdings rose 3.87 tonnes to 680.27 tonnes on Thursday.
* Russia and Kazakhstan raised their gold holdings for a sixth straight month in August, while Jordan and United Arab Emirates both bolstered their reserves in July, according to International Monetary Fund data. ID:nL1N11U2U1
* Gold miners trimmed their outstanding global hedge book by 17 tonnes in the second quarter, an industry report showed on Thursday, as two of last year's biggest hedgers, Fresnillo (LONDON:FRES) and Polyus Gold, closed out positions. ID:nL5N11U30M
* China's net gold imports from main conduit Hong Kong rose to a three-month high in August. ID:nL4N11U2XS
* Among other precious metals, platinum XPT= slid for a fifth session out of six on fears that demand from the auto sector, where the metal is used in diesel catalysts, could take a hit following the Volkswagen emissions scandal. It fell to $924.50 earlier this week, its lowest since January 2009.
* Palladium XPD= , which is used in gasoline autocatalysts, rose sharply this week on expectations that consumers could move away from diesel cars to gasoline cars. With a near 8-percent jump this week, palladium was poised for its biggest weekly jump since March 2013.
* For the top stories on metals and other news, click TOP/MTL or GOL
MARKET NEWS
* Asian shares edged up on Friday, while the dollar rose and U.S. interest rate futures price briefly dropped after Yellen suggested the Fed is still on track to raise rates this year. MKTS/GLOB
PRICES AT 0043 GMT Metal
Last
Change Pct chg
Spot gold
1149.2
-4.42
-0.38 Spot silver
15.07
-0.05
-0.33 Spot platinum
945.65
-6.85
-0.72 Spot palladium
649.92
-3.58
-0.55 Comex gold
1149.1
-4.7
-0.41 Comex silver
15.095 -0.035
-0.23 Euro
1.1171
DXY
96.293
COMEX gold and silver contracts show the most active months