Gold pares gains as Yellen signals a 2015 rate hike

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Gold gave up earlier gains on Friday after U.S. Federal Reserve Chair Janet Yellen said she expected the central bank to raise interest rates sometime this year but pointed to concerns that U.S. labor markets remain weak.

In a speech that cautioned about the status of workers as well as some international risks, Yellen gave no direct hint about whether she anticipated more than one rate hike over the Fed's four remaining meetings in 2015.

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"(It) looks like a probable interest rate hike scheduled for this year, with or without Greece," said George Gero, precious metals strategist for RBC Capital Markets in New York.

Spot gold was up 0.1 percent at $1,160.33 an ounce. Prices remained near a four-month low of $1,146.75 reached on Wednesday.

U.S. gold for August delivery settled down 0.1 percent at $1,157.90 an ounce.

"Yellen's more hawkish-than-expected tone is sparking a modest gold selloff," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

The U.S. dollar pared its losses against a basket of major currencies, and the euro gave back some of its gains against the greenback.

"Gold is getting some support from the stronger euro, but if we get a deal with Greece on Sunday, it should be bearish for gold because it removes any risk," Societe Generale analyst Robin Bhar said.

Physical demand remained tepid this week as prospective investors in China chased bargains in equities after a market selloff, while those in India delayed purchases.

The metal in India still sold at a discount to the global benchmark.

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Chinese stocks rose sharply for the second straight day after Beijing banned shareholders with large stakes in listed companies from selling, moving to stem a rout that pulled down key indexes by about 30 percent from mid-June.

Also benefiting gold earlier, the International Monetary Fund trimmed its forecast for global economic growth this year to 3.3 percent from 3.5 percent, citing recent weakness in the United States.

Silver was up 1 percent at $15.53 an ounce, palladium rose 1.7 percent to $648.50 an ounce and platinum gained 0.5 percent to $1,025.25 an ounce, slightly rebounding from a 6-1/2 year low near $1,000 hit on Wednesday.