* Gold gives back some of sharp overnight gains
* Palladium on track for biggest weekly rise since Dec 2011
* Graphic-Platinum vs gold: http://link.reuters.com/xez92s (Updates prices, adds comment)
By Josephine Mason and Jan Harvey
NEW YORK/LONDON, Sept 25 (Reuters) - Gold fell from one-month highs on Friday after Federal Reserve Chair Janet Yellen kept the door open to an increase in U.S. interest rates this year, sparking a dollar rally, while palladium was on track for its biggest weekly rise in almost four years.
Yellen said in a speech on Thursday that she expected the U.S. central bank to start raising rates later in 2015, as long as inflation remained stable and the U.S. economy was strong enough to boost employment.
Expectations for a rise in ultra-low rates, which have cut the opportunity cost of holding gold while weighing on the dollar, have helped push the metal down 5 percent this year.
Gold rallied after the Fed opted at its September policy meeting to keep rates on hold, hitting its highest since Aug. 25 on Thursday as dollar weakness prompted a wave of short covering. It has failed to maintain those gains, however.
Spot gold XAU= was down 0.5 percent at $1,148.6 an ounce at 3:41 p.m. (1941 GMT), having climbed 2.1 percent on Thursday, its biggest one-day rise since January. U.S. gold futures GCv1 for December delivery settled down 0.7 percent at $1,145.6, on track for their fifth straight quarterly loss.
Prices will likely meet resistance around the $1,150 per ounce mark, the 100-day moving average, traders said.
"The sell-off is most likely on the clarity from the Fed on a rate hike in December," Pradeep Unni at Richcomm Global Services said. "It's clear from (Yellen's) talk that the Fed paused in September only for the global markets' sake."
The speech sent the dollar to a five-week high against a basket of major currencies .DXY . The U.S. currency extended gains after data showed the U.S. economy expanded more than previously estimated in the second quarter.
Silver XAG= was down 0.3 percent at $15.12 an ounce, while platinum XPT= dipped 1.18 percent at $951.25 an ounce. Palladium XPD= was up 0.84 percent at $665 an ounce, off a nearly 12-week high at $674.50.
Platinum hit a 6-1/2-year low on Wednesday and was set for its biggest weekly drop since mid-July on fears that demand from the auto sector, where the metal is used in diesel catalysts, could fall following the Volkswagen (XETRA:VOWG) emissions scandal.
In contrast, palladium, used more heavily in gasoline auto catalysts, was poised for its biggest weekly rise since December 2011, up 9 percent, on expectations that consumers could move away from diesel towards gasoline vehicles.