PRECIOUS-Gold firms on Ukraine tensions ahead of Fed testimony

* Prices taking support from stand-off in Ukraine

* Traders await comments from Fed's Yellen later

* Chinese demand for gold bars fell 44 pct in Q1

(Updates prices, adds comment)

LONDON, May 7 (Reuters) - Gold firmed on Wednesday as concerns that a stand-off between pro-Russian separatists and government troops in Ukraine may escalate fuelled demand, and ahead of congressional testimony from Federal Reserve chair Janet Yellen later.

Investors are braced for the possibility that dovish comments at her congressional hearings will further undermine the dollar, which hit a 6-1/2-month low against a currency basket on Tuesday.

That would typically be expected to boost gold, which benefits from looser monetary policy and a soft dollar.

Spot gold rose 0.1 percent to $1,308.60 an ounce by 1158 GMT. It touched a three-week high of $1,315.60 on Monday. U.S. gold futures for June delivery were up 20 cents an ounce at $1,308.80.

"Ukraine is keeping a bit of upside pressure on gold," Sharps Pixley Chief Executive Ross Norman said. "There are a lot of different drivers for gold out there. The dollar is normally looked on as the main one, but geopolitical tensions can trump that, and that seems to be what's happening here."

In Ukraine, both sides have been burying their dead as the country slides further towards war, with supporters of Russia and of a united Ukraine accusing each other of tearing the country apart.

On the wider markets, European stocks edged lower as a sell-off on other markets unsettled investors and results from brewer Carlsberg and bank Societe Generale showed the Ukraine crisis was starting to hurt large western companies.

The dollar was little changed ahead of Yellen's comments.

"Janet Yellen's testimony...in Washington is the big event on the calendar today, and the market is positioning itself for (more) dovish comments," Societe Generale said in a note. "That means that we would get a bigger reaction in both bond and FX markets to relatively hawkish comments."


Gold buying in Asia picked up on Wednesday as markets re-opened after public holidays in Japan, Hong Kong and South Korea, dealers said.

"Decent demand was seen at the onset by Japanese traders," bullion house MKS said in a note. "Loco London gold managed to rally through $1,310 and maintain this level into the Chinese open."

Gold prices in Shanghai were trading $2 an ounce above the global benchmark, reversing the trend from recent months when prices were largely at a discount. Despite the price premiums, demand was muted, dealers said.

Chinese buying has been subdued as a weaker currency has discouraged importing banks from purchasing big quantities.

China's demand for gold bars fell nearly 44 percent in the first quarter of 2014 from year ago, while total gold consumption edged up about 0.8 percent, the China Gold Association said on Wednesday.

Among other precious metals, silver was up 0.5 percent at $19.61 an ounce, while spot platinum was down 0.5 percent at $1,445.50 an ounce and spot palladium was down 0.6 percent at $808.97 an ounce.

The platinum group metals have been underpinned by a miners' strike at major producers Anglo American Platinum, Impala Platinum and Lonmin, which began on Jan. 23 and has affected 40 percent of global output.

"The market may be close to another leg higher if the strike is not resolved soon," HSBC said in a note.

(Additional reporting by A. Ananthalakshmi in Singapore; editing by Susan Thomas)