* Dollar strengthens versus yen and euro
* Yellen to testify before Congress on Wednesday, Thursday
* Coming Up: U.S. retail sales; 1230 GMT (Adds Phillip Futures comment, updates prices)
By Manolo Serapio Jr
MANILA, July 14 (Reuters) - Gold stretched losses from the previous session on Tuesday as the dollar gained on expectations the U.S. Federal Reserve was on course to increase interest rates this year.
Fed Chair Janet Yellen may provide more signals of a looming rate hike at her semiannual testimony to Congress on Wednesday and Thursday, shifting global focus to the U.S. central bank from Greece which agreed to talks on an 86-billion-euro bailout in exchange for pledging tough reforms.
Investors are now waiting for what Yellen would say in her testimony even as a U.S. rate hike is “pretty much written on the wall”, said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“It’s probably a one-time rate increase this year and probably in September and we may see gold falling to $1,080 when that happens.”
Spot gold was down 0.3 percent at $1,154.08 an ounce by 0612 GMT, after dropping as much as 1.1 percent on Monday.
Yellen said on Friday the U.S. central bank was on course to raise interest rates at some point later this year, the first hike in nearly a decade, though labour markets remained weak.
Investors tend to shun gold, which doesn’t pay interest, when market expectations point to U.S. interest rates rising.
The metal is not far above a four-month low of $1,146.75 hit last week, with its safe-haven draw also not working despite the recent equities rout in China and the Greek debt crisis.
“Where once we felt that gold was being extremely sticky around the $1,200 level, that level of fluctuation has since been shifted substantially downwards,” Phillip Futures analyst Howie Lee said in a note.
Amid waning interest in gold as an investment, Lee said he now sees resistance for gold at $1,165.
In Greece, the terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Prime Minister Alexis Tsipras to abandon promises of ending austerity.
Economic growth in top gold consumer China is forecast to be the weakest since the global financial crisis in the second quarter, with a Reuters poll of 52 economists showing annual GDP expansion of 6.9 percent. The data will be released on Wednesday.
U.S. gold for August delivery was off 0.1 percent at $1,153.90 an ounce. Spot silver slipped 0.9 percent to $15.36 an ounce, platinum eased 0.2 percent to $1,029.49 an ounce and palladium dropped 0.4 percent to $654.22. (Editing by Himani Sarkar)