PRECIOUS-Gold rises on US budget talks, Fed stimulus hopes

* Uncertainty over US budge talk, euro zone debt crisis weigh

* Investors eye Fed policy meeting on Dec 11-12 for direction

* Paulson & Co had mixed Nov. performance, cites weaker gold

(Updates throughout, changes byline, dateline, previously LONDON) NEW YORK, Dec 10 (Reuters) - Gold rose for a third session on Monday as investors were uncertain about the U.S. budget crisis and hopeful that the Federal Reserve will unveil new economic stimulus this week. Growing unease about Europe boosted safe-haven bids for bullion after Italian Prime Minister Mario Monti announced he would resign once the 2013 budget is approved. Investors also bought more gold ahead of a two-day Fed policy meeting. The U.S. central bank is expected to announce monthly bond purchases of $45 billion, on top of the $40 billion in mortgage-backed security purchases it announced in September.

Also underpinning gold was a lack of apparent progress in U.S. budget talks. U.S. President Barack Obama was scheduled to speak in Michigan on Monday afternoon. He met on Sunday with Republican House Speaker John Boehner in hopes of reaching agreement on a budget ahead of automatic tax hikes and spending cuts set to go into effect in the new year. Analysts said safe havens such as gold and silver could sell off in the near term if a budget deal is clinched. "Although markets are taking the lack of progress thus far with an impressive degree of complacency, we wonder when a potential breaking point will be reached," said Edward Meir, metals analyst at brokerage INTL FCStone. "As a result, we would be cautious on gold and silver here, but less so on platinum and palladium." Spot gold rose 0.5 percent to $1,712.80 an ounce by 11:23 a.m. EST (1622 GMT), rebounding from a one-month low hit on Friday after data showed U.S. employers hired more workers than expected in November. U.S. gold futures for February delivery were up $8.90 to $1,714.40, with trading volume on track to finish sharply below its 30-day average, preliminary Reuters data showed.

PAULSON & CO HAD MIXED NOVEMBER Gold market largely ignored news that high-profile hedge fund manager John Paulson told his clients on Friday evening that his funds experienced mixed returns in November with softer gold prices weighing on some portfolios. Late Friday's CFTC data also showed hedge fund and money managers cut their bullish bets on U.S. gold last week to the lowest level since late August. Among other precious metals, silver was up 0.9 percent at $33.28 an ounce. Platinum climbed 1.6 percent to $1,620.50, while palladium gained 1 percent to $699.70.

Prices at 11:23 a.m. EST (1622 GMT)

LAST NET PCT YTD CHG CHG CHG US gold 1714.40 8.90 0.5% 9.4% US silver 33.370 0.239 0.7% 19.5% US platinum 1626.00 19.00 1.2% 16.2% US palladium 704.60 6.60 1.0% 7.4%Gold 1712.80 8.76 0.5% 9.5% Silver 33.28 0.29 0.9% 20.2% Platinum 1620.50 25.50 1.6% 16.3% Palladium 699.70 6.70 1.0% 7.2%Gold Fix 1712.50 4.00 0.2% 8.8% Silver Fix 33.34 49.00 1.5% 18.3% Platinum Fix 1622.00 4.00 0.2% 17.5% Palladium Fix 699.00 1.00 0.1% 9.9%

(Additional reporting by David Brough in London)