PRECIOUS-Gold pares gains after hitting two-week high; Fed’s Yellen in focus – Reuters

* Investors await Yellen speech ahead of June  policy meeting     * Gold jumped 2.8 pct on Friday  as dollar dipped   (Updates throughout, adds  quotes, changes dateline from Bengaluru)     By  Clara Denina      LONDON, June 6 Gold pared early  gains on Monday, having touched a two-week high  that built on Friday's biggest one-day gain in  nearly four months after surprisingly weak U.S.  jobs data cut the chance of a June rise in U.S.  interest rates.     Bullion, which has gained  about 17 percent this year, had been under  pressure in recent weeks as comments from senior  U.S. central bank officials, including Fed chief  Janet Yellen, boosted expectations of an imminent  interest rate rise.     Higher interest rates  increase the opportunity cost of holding  non-yielding gold while bolstering the dollar.      Spot gold rose to its highest since May 24 at $     1,248.40 an ounce, before easing and was down 0.3  percent at $    1,240.50 by 1003 GMT.     Data on  Friday showed that the U.S. economy created the  fewest number of jobs in more than 5-1/2 years in  May.       The surprisingly weak employment number  weighed on the dollar, which on Friday posted its  biggest one-day drop in four months against a  basket of major currencies, sending gold  2.8  percent higher for highest one-day percentage gain  since Feb. 11.     Many speculative positions in  gold had been reduced in the run-up to the U.S.  data, so "there was a lot of adjustments to be  done after the weak number", said Saxo Bank senior  manager Ole Hansen.     "Since Friday, the  technical outlook has improved ... and although we  could see a temporary retracement to the $     1,225 area, the outlook for gold is positive."      The focus for traders and investors shifted to a  speech by Fed Chair Yellen at the World Affairs  Council of Philadelphia at 1630 GMT, looking for  further clues on interest rates.          Wall  Street's leading banks unanimously expect the Fed  to leave rates unchanged this month, a Reuters  poll showed.       "Although prices could still  work a bit higher from here over the course of the  month, we think values will be hard pressed to  push above the $    1,275 range over the course of  June," said INTL FCStone analyst Edward Meir.       "On the downside, another retest of $    1,190  cannot be ruled out, especially if the dollar  stabilizes on the back of stronger U.S. macro  numbers."     Hedge funds and money managers  reduced their bullish position in COMEX gold  contracts in the week to May 31, government data  showed.      Holdings in SPDR Gold Trust, the  world's largest gold-backed exchange-traded fund,  rose 0.7 percent to 881.44 tonnes on Friday, the  highest since October 2013.      Among other  precious metals, spot silver was unchanged at $     16.40 an ounce. Spot platinum gained 0.3 percent  to $    983.49 and palladium rose 0.5 percent to$     553.47.         (Additional reporting by  Vijaykumar Vedala in Bengaluru; Editing by David  Goodman)