* Fed Chair Powell to speak to Congress on Tuesday * Palladium deficit could ease this year, Heraeus says (Updates prices) June 21 (Reuters) - Gold on Monday clawed back some losses from its biggest weekly percentage drop since March 2020, as a pause in the U.S. dollar’s rally helped restore the metal’s allure. Spot gold was up 1.1% at $1,782.83 per ounce by 1:48 p.m. EDT (1748 GMT), while U.S. gold futures settled up 0.8% at $1,782.90. “People are using the correction to buy gold, at these price levels, there is value to hold positions in gold, especially for the long run,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago Gold prices fell 6%, or $113 an ounce, last week as the U.S. Federal Reserve signaled it would soon start tapering its asset purchases and could start raising interest rates in 2023. But the dollar index has retreated from 2-1/2-month highs, prompting investors to turn to gold, which fell for six straight sessions before Monday’s bounce. U.S. 10-year Treasury yields also rose from a four-month low, raising non-yielding bullion’s opportunity cost. . Bank of America Global Research said that given a more hawkish Fed, the risk of rising real rates would keep gold prices capped into the end of the year. Streible, however, predicted gold would drift above $1,800 an ounce, citing an “overbought” dollar, the Fed’s continued bond purchases and interest rates that will not rise anytime soon. Market participants will listen now to congressional speeches from a number of U.S. central bank officials, including Fed Chair Jerome Powell, who is due to speak on Tuesday. In other precious metals, platinum rose 2.5% to $1,060.05 per ounce, while palladium climbed 4.5% to $2,575.24 after tumbling more than 11% last week. Global palladium markets have been in deficit this year due to rebounding economic growth and tighter emissions standards that boosted demand from automobiles. Another negative factor has been supply glitches at Russia’s Nornickel. Analysts at trading firm Heraeus said, however, that supply chain disruptions in automobiles could ease the tightness in palladium markets. Elsewhere, silver rose 0.6% to $25.95 an ounce. (Reporting by Brijesh Patel and Nakul Iyer in Bengaluru Editing by Paul Simao and Matthew Lewis) Our Standards: The Thomson Reuters Trust Principles.