* Prices hits lowest level since Oct. 17
* Fed taper speculation leaves dollar near 2-week high
* Physical demand fails to pick up despite lower prices
NEW YORK/LONDON, Nov 11 (Reuters) - Gold prices fell on Monday to their lowest levels in nearly a month as signs of steady Chinese economic growth fuelled worries about monetary tightening there and extended the previous session's slide on U.S. Federal Reserve tapering fears. Bullion prices fell after data showed China's annual inflation climbed and as factory output and investment data pointed to signs of stabilization in the world's second-largest economy, fanning market worries about policy tightening, traders said. Gold fell for a third consecutive session. It posted its biggest one-day fall in more than a month on Friday when surprisingly strong U.S. jobs data for October indicated the Fed could cut its bond-buying stimulus as early as December. "We are still trading under the threat of Fed tapering as a response to Friday's nonfarm payroll data," said David Meger, director of metals trading at futures brokerage Vision Financial Markets. "The ongoing strength of the equities market continues to take investment dollars away from the precious metals arena," Meger said. Spot gold was down 0.5 percent at $1,282.56 an ounce Oct. 17 at $1,278.94 an ounce in early trade. U.S. Comex gold futures for December settled down $3.50 at $1,281.10 an ounce, with trading volume about 45 percent below its 250-day average, preliminary Reuters data showed. U.S. stocks were little changed on Monday as the market took a breather after its five-week winning streak. The S&P 500 equities index held within striking distance of a record high.
PHYSICAL DEMAND STILL WEAK Gold's recent drop to below $1,300 has failed to attract demand in Asia as buyers waiting on the sidelines expect prices to weaken further, dealers said. Dealers in Hong Kong said there was no strong pickup in demand, and premiums at the Shanghai Gold Exchange are now far from the levels seen after April's record two-day $225 drop in bullion prices. In physical gold news, precious metals storage firm Malca-Amit has opened a facility in the new Shanghai free trade zone that can store up to 2,000 tonnes of gold, as it hopes to benefit from continued strength in China's demand for bullion.
On charts, gold's slide below $1,300 an ounce on Friday has put the metal on track to retest its October low of $1,251. A failure of support there could set up a break below June's three-year low, analysts said. Spot silver fell 0.4 percent to $21.37 an ounce. Platinum dropped 0.7 percent to $1,428.99 an ounce, while palladium fell 0.6 percent to $751.50 an ounce.
1:54 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1281.10 -3.50 -0.3 1278.10 1288.80 84,226 US Silver DEC 21.282 -0.035 -0.2 21.230 21.450 24,683 US Plat JAN 1432.40 -10.50 -0.7 1425.30 1446.30 7,228 US Pall DEC 754.55 -3.35 -0.4 746.30 760.20 3,368 Gold 1282.56 -6.04 -0.5 1278.94 1288.46 Silver 21.370 -0.090 -0.4 21.270 21.460 Platinum 1428.99 -9.51 -0.7 1428.50 1443.50 Palladium 751.50 -4.47 -0.6 749.00 756.22 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 250D AVG CURRENT CHG US Gold 105,630 189,283 23.18 -1.01 US Silver 32,364 58,610 35.14 1.70 US Platinum 7,337 12,978 20.36 0.00 US Palladium 3,762 5,806