September 24, 2015 / 10:32 AM / 4 years ago

PRECIOUS-Gold rallies most in 8 months on weak dollar, short covering

* Gold hits one-month high

* Palladium down from highest since mid-July

* Market focus on upcoming speech by Fed’s Yellen (Updates prices; adds comment, second byline, NEW YORK dateline)

By Josephine Mason and Clara Denina

NEW YORK/LONDON, Sept 24 (Reuters) - Spot gold rallied more than 2 percent on Thursday for the biggest one-day gain in almost eight months as a weak U.S. dollar sparked short covering while platinum recovered from a four-day rout even as automotive demand woes lingered.

In its best daily performance since late January, gold touched a one-month high of $1,156 per ounce as the dollar eased after data showed U.S. durable goods fell 2 percent in August.

The data prompted short covering and safe-haven bids amid worries about global economic growth, which could delay the tightening of U.S. monetary policy. U.S. equities came under pressure.

Investors will monitor a speech by Federal Reserve Chair Janet Yellen at 5 p.m. (2100 GMT) for clues on when the U.S. central bank will begin to raise benchmark interest rates.

“Gold (is) seeing better prices with short covering, buying back ahead of option expiration tonight,” said RBC Wealth Management adviser George Gero.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose for a second straight session, providing some support for prices. The fund added 0.60 tonne on Wednesday, bringing total holdings to 676.40 tonnes.

At 4:09 p.m. (2009 GMT), prices were up 2 percent at $1,153.4 per ounce, while the U.S. gold futures contract for December delivery settled up 2 percent at $1,153.8 an ounce.

Silver rose 2.4 percent to $15.16 an ounce.

Platinum clawed back some ground lost from a four-day rout on fears about demand from the auto sector following the Volkswagen emissions scandal.

Platinum is used in diesel catalysts to clean up exhaust emissions.

Spot platinum was up 2.3 percent at $958 an ounce, after losing about 5 percent in the past four sessions. The metal remained within sight of a 6-1/2-year low of $924.50 hit on Wednesday.

“In the short term, there may be more downside in platinum as more details about the VW situation get uncovered ... $900 could be tested, maybe a little bit lower,” ABN Amro analyst Georgette Boele said.

Palladium, predominantly used in gasoline catalysts, retreated from an earlier mid-July high, and was up 1.12 percent at $658.5 an ounce.

Platinum had some support on Thursday from Japanese traders returning from a three-day holiday.

“The Japanese came in aggressively on the bid this morning, taking the white metal more than $20 higher,” said MKS Group trader Jason Cerisola.

Spot palladium logged a near 7 percent jump in the previous session. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by William Hardy and James Dalgleish)

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