* Gold snaps three days of gains to drift lower
* Global equities close to six-year highs
* Chinese premiums ease; Indian demand stays soft
(Updates prices, adds comment)
LONDON, Nov 18 (Reuters) - Gold fell on Monday as a rebound in equities and lacklustre physical demand prompted traders to cash in three days' gains, though expectations that U.S. monetary policy will stay loose lent support.
Speculation that incoming Federal Reserve chief Janet Yellen would maintain the Fed's easy monetary policy helped to lift gold late last week, but it ran into tough resistance below $1,300 an ounce.
Buoyant stock markets diverted some investment interest from gold. Global shares climbed close to six-year highs on Monday on signs of ambitious economic reform in China and the prospect of extended stimulus in the United States.
Spot gold was down 0.9 percent at $1,278.16 an ounce at 1303 GMT. The metal climbed more than $20 an ounce in the last three days of last week after hitting a one-month low at $1,260.89 on Tuesday.
U.S. gold futures for December delivery were down by $9.60 an ounce at $1,277.80.
"Gold is really stuck in limbo at the moment," Saxo Bank's head of commodity research, Ole Hansen, said. "The Yellen yell last week failed to lift gold through resistance and with stocks continuing to be the favourite place to be, alternatives such as gold are receiving little attention."
A resumption in outflows from gold exchange-traded products - which issue securities backed by physical bullion - is also hurting investor sentiment, he said.
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, said its bullion holdings fell by 2.7 tonnes last week after posting their first net weekly inflow since late August in the previous week, of 2.1 tonnes.
Gold dominated a stampede out of commodities in the week to Nov. 12 as hedge funds and other speculative investors sold off more than $4 billion in U.S. futures and options contracts, data showed on Friday.
Prices are down 23 percent this year on expectations of an imminent end to ultra-loose monetary policy, which has pushed gold higher in recent years by keeping interest rates low while stoking expectations of rising inflation.
Gold demand from major consumers in Asia remained muted on Monday. Chinese premiums have fallen to about $5.50 an ounce from about $7.50 on Friday.
Prices are also suffering from a dearth of demand from India, which is set to be overtaken by China as the world's No. 1 gold buyer this year after Indian authorities increased export duties for the metal.
"Weakness in the physical demand especially from India is so evident that any positive news for gold still does not move the markets the way it would during the first four months of this year," EmiratesNBD said in a note over the weekend.
Among other precious metals, silver was down 1.2 percent at $20.52 an ounce, while spot platinum slipped by 0.8 percent to $1,426 an ounce and spot palladium fell 1.2 percent to $721.47 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Pravin Char and David Goodman)