* Gold up for 4th day on bets Fed will keep stimulus
* Prices climb close to 5-week high hit on Monday
* Gold due for correction, physical demand could weigh -analysts
(Adds analyst comment, updates prices) SINGAPORE, Oct 29 (Reuters) - Gold climbed for a fourth session on Tuesday as weak U.S. economic data boosted views the Federal Reserve would maintain its stimulus measures, burnishing the metal's appeal as an inflation-hedge. The Fed begins a two-day policy meeting on Tuesday in which it is widely expected to continue buying back bonds at an $85 billion monthly pace. Gold prices have fallen nearly 20 percent this year on fears the Fed could begin tapering stimulus, but a budget battle in Washington and a string of weak economic data have raised questions over whether the bank would scale back, giving bullion a boost. "In line with market expectations, we think the Fed will continue with quantitative easing," said Songwut Apirakkhit, managing director of Globlex Holding Management in Bangkok. "However, we think the expectations have already been priced in and gold is due for a correction," he said. Although he expects gold to end the year around the current levels. Spot gold had edged up 0.3 percent to $1,355.49 an ounce by 0324 GMT, gaining about 8 percent since marking a three-month low on Oct. 15. On Monday, the metal hit its highest since Sept. 20 at $1,361.60. U.S. manufacturing output barely rose in September and contracts to buy previously owned homes recorded their largest drop in nearly 3-1/2 years, the latest signs the economy's momentum ebbed as the third quarter ended. Many economists believe the Fed could push tapering to early next year. Though a prolonged period of easy money could support gold, physical demand could take a hit due to the higher prices. Demand in Asia has remained subdued for a while. "We continue to view gold as precariously placed while physical demand for the metal remains soft," ANZ analysts said in a note. "We viewed the metal as overbought above $1,340 on the back of weak demand from China and continued ETF selling." Outflows from gold-backed exchange traded funds have continued, weighing on investor sentiment.
Precious metals prices 0324 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1355.49 3.90 +0.29 -19.05 Spot Silver 22.50 0.03 +0.13 -25.69 Spot Platinum 1465.49 -4.51 -0.31 -4.53 Spot Palladium 739.97 -3.53 -0.47 6.93 COMEX GOLD DEC3 1356.00 3.80 +0.28 -19.08 13391 COMEX SILVER DEC3 22.52 -0.02 -0.08 -25.69 4117 Euro/Dollar 1.3776 Dollar/Yen 97.54
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)