* Gold hits support after biggest 1-day drop since June
* Investors cautious ahead of neck-and-neck U.S. election
* Hong Kong's gold shipments to China jump in September
LONDON, Nov 5 (Reuters) - Gold prices firmed a touch on Monday after posting their biggest one-day drop since mid-June in the previous session as investors took to the sidelines ahead of Tuesday's U.S. presidential election.
Gains in the metal were limited by weakness in stock markets and a rise in the dollar, however, as low-risk assets rose at the start of a week in which the United States votes in a new president.
The U.S. elections will be closely watched by financial markets, with incumbent Barack Obama seen as more supportive of continued stimulus measures, while Republican challenger Mitt Romney is expected not to favour additional easing.
A Romney team sceptical of strong Federal Reserve stimulus would be unlikely to renominate Fed chief Ben Bernanke for a third term in 2014.
``Although the race is close, I think if Romney won, it would be a shock to the market,'' said Mitsubishi precious metals strategist Matthew Turner.
``The general expectation is of an Obama victory, which is more of the same. That's bullish for gold,'' he added, referring to expectations for a continuation of relaxed monetary policy, which will stoke inflation concerns and keep interest rates low.
Spot gold was up 0.4 percent at $1,682.66 at 1421 GMT, having earlier touched a nine-week low of $1,672.24. U.S. gold futures for December rose $7.50 to $1,682.70.
Prices slid more than 2 percent on Friday after better than expected U.S. jobs data lifted the dollar and reduced pressure on the U.S. authorities for a continuation of its ultra-loose monetary policy.
``The selling was overdone on Friday. You often get a bounce back after a big fall as jewellers and investors take advantage of the price fall,'' Turner said.
Cash printing by central banks boosts gold's appeal by stoking concerns over inflation while keeping pressure on interest rates. The metal jumped to nearly $1,800 an ounce last month on central bank stimulus measures, but has since eased.
Ahead of Tuesday's vote, Obama and Romney crisscrossed the country in the closing stages of a campaign that polls show is deadlocked nationally.
In addition to monetary policy, the elections have implications for how the U.S. will deal with its so-called fiscal cliff, when about $600 billion in government spending cuts and higher taxes are set to kick in from January 1.
``The outcome of a divided Congress, and in turn much back and forth disagreement surrounding the fiscal cliff and the debt ceiling, would be gold supportive,'' UBS said in a note.
CHINESE IMPORTS JUMP
Hong Kong's gold shipments to mainland China jumped 23 percent on the year in September to 69.711 tonnes as demand picked up ahead of the holiday season. Net exports decreased 13 percent on the year.
As China does not publish gold trade data, the numbers from Hong Kong - a main conduit for gold into China - help gauge China's gold trade. China is gearing up to overtake India as the world's top gold consumer this year.
Importers in India stocked up on gold in the week preceding key festivals as prices hovered near their lowest level in more than 10 weeks, helped by a weaker rupee.
Indian gold futures are likely to fall past their lowest level in more than 10 weeks over the next fortnight, weighed by a stronger dollar, considered as an alternative to the yellow metal, and falling crude oil prices, but recovering physical demand could help limit the downside.
The bullish money held by hedge funds and other big speculators in U.S. commodities fell by $8 billion in the week to Oct. 30 - the biggest weekly decline in nearly six months - after Hurricane Sandy's devastating hit on the U.S. East Coast.
Gold saw an exit of $2 billion in managed money net longs, adding to the previous week's decline of $3.8 billion, data showed on Friday. This leaves plenty of scope for these positions to rise, analysts said.
``Given the price move on Friday, positioning is likely to have been scaled back even further, leaving a relatively clean market base ahead of the U.S. elections,'' Barclays Capital said in a note.
Spot platinum was up 0.4 percent at $1,542.75 and spot palladium fell 1.6 percent to $599.50.
Silver was up 0.8 percent at $31.04 an ounce.