PRECIOUS-Gold flat as rally on Fed hopes, US shutdown peters out

Frank Tang and Jan Harvey
Monday, 21 Oct 2013 | 11:49 AM ET

* Gold, US markets flat after weak existing home sales

* Bullion ETF holdings down, reflects weak interest

(Adds analyst comment, second byline, dateline, updates market activity) NEW YORK/LONDON, Oct 21 (Reuters) - Gold prices were little changed on Monday, struggling to build on their biggest weekly rise in two months, as investors took profits after a short-covering rally sparked by hopes the Federal Reserve would postpone its withdrawal of monetary stimulus. On Tuesday, gold prices tracked nearly flat U.S. equities and a steady dollar, as the markets mostly reacted little to a report showing weaker U.S. home resale and price growth in September due to higher mortgage rates. Gold climbed nearly 4 percent last week on expectations the Fed would have to maintain stimulus measures after a two-week U.S. government shutdown was likely to hurt economic growth. Tom Fitzpatrick, analyst at Citigroup's technical research unit CitiFX, said that gold prices are likely to rise alongside with signs of a weaker U.S. dollar, stronger equities and lower U.S. Treasury yields. "The price action across markets is clearly starting to reflect the risk that the Fed is less likely to taper its asset purchases in the near term," Fitzpatrick said. Spot gold was up 0.1 percent at $1,316.76 an ounce by 11:08 a.m. EDT (1508 GMT). U.S. gold futures for December delivery were up $2.20 an ounce at $1,316.80. Spot prices hit their highest in 1-1/2 weeks on Friday after rebounding from a three-month low at $1,251.66, a move analysts attributed to investors holding short positions - or commitments to sell - closing out those contracts. As a gauge of investor interest, holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, held near 4-1/2-year lows on Monday, having posted a seventh consecutive weekly outflow last week. Among other precious metals, silver outperformed, rising 1.6 percent to $22.23 an ounce. Platinum edged up 0.1 percent at $1,432 an ounce, while palladium was up 0.8 percent at $744.47 an ounce.

Prices at 11:08 a.m. EDT (1508 GMT)

LAST NET PCT YTD CHG CHG CHG US gold 1316.80 2.20 0.2% -21.4% US silver 22.280 0.004 1.7% -26.3% US platinum 1439.20 4.40 0.3% -6.5% US palladium 747.75 7.10 1.0% 6.3% Gold 1316.76 1.01 0.1% -21.4% Silver 22.23 0.35 1.6% -26.7% Platinum 1432.00 0.90 0.1% -6.9% Palladium 744.47 5.97 0.8% 6.0% Gold Fix 1317.50 1.50 0.1% -20.8% Silver Fix 22.09 22.00 1.0% -26.2% Platinum Fix 1438.00 1.00 0.1% -5.6% Palladium Fix 746.00 1.00 0.1% 6.7%

(Editing by James Jukwey, Dale Hudson and Andrew Hay)