* Fed Chair Yellen says labour market expected to improve
* European stocks steady ahead of Greek vote
* Silver prices fall nearly 2 percent (Releads, updates prices, adds comment)
By Jan Harvey
LONDON, July 15 (Reuters) - Gold prices fell to four-month lows on Wednesday, extending losses for a third session as Federal Reserve Chair Janet Yellen said the U.S. central bank remains on track to raise interest rates this year.
In testimony prepared for the U.S. House of Representatives' Financial Services Committee, Yellen said the labour market is expected to improve steadily, and that turmoil abroad is unlikely to throw the U.S. economy off track. ID:nN9N0ZU000
That knocked gold to a low of $1,145.75 an ounce, its weakest since mid-March.
Spot gold XAU= was down 0.6 percent at $1,147.43 an ounce at 1402 GMT, while U.S. gold futures GCv1 for August delivery were down $7.30 an ounce at $1,146.30.
U.S. stocks opened marginally lower after Yellen's remarks, while the dollar rose half a percent against a basket of currencies, pressuring gold, which is priced in the dollar.
"Yellen confirming that the Fed will raise interest rates later this year is nothing new, but nevertheless this helped the dollar to appreciate, which is weighing on the gold price," Commerzbank analyst Daniel Briesemann said.
"We've also had better-than-expected economic data out of the United States, both before and after Yellen's words, so that is also supporting the dollar."
Data released on Wednesday showed U.S. producer prices rose more than expected in June, and that factory activity rebounded in New York state this month. ID:nL2N0ZV0Q9
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European shares steadied at three-week highs, with investors focusing on a crucial vote in Greece over a proposed bailout package to save the country from bankruptcy.
Prime Minister Alexis Tsipras battled to win lawmakers' approval for the deal to keep Greece in the euro, while the country's creditors, pressed by the IMF to provide massive debt relief, struggled to agree a financial lifeline.
A lot of the measures in the deal struck with Greece's lenders will have a recessionary effect, but removing the prospect of a "Grexit" will help offset their impact and bring in investments, Finance Minister Euclid Tsakalotos said. ID:nA8N0ZT00H
"Greece developments have not had a bullish impact on gold but further glitches in the Greek debt relief process could lend modest support to prices," HSBC said in a note.
Among other precious metals, silver XAG= was down 1.8 percent at $15.04 an ounce, platinum XPT= was down 1 percent at $1,013 an ounce and palladium XPD= was up 0.6 percent at $646 an ounce.