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PRECIOUS-Gold drops on US stimulus worries, SPDR outflow

Sunday, 24 Nov 2013 | 7:38 PM ET

SINGAPORE, Nov 25 (Reuters) - Gold edged towards a four-month low on Monday on fears of an early end to U.S. stimulus measures and as holdings in the biggest bullion-backed exchange-traded fund fell the most in three weeks.

FUNDAMENTALS

* Spot gold fell 0.3 percent to $1,239.84 an ounce by 0022 GMT, after posting its biggest weekly loss in two months. The metal wasn't too far from its four-month low of $1,236.29 hit last week.

* Two Federal Reserve officials said on Friday that a debate over rolling back the bank's bond-buying stimulus was on the table at the December policy meeting, raising fears that the Fed could begin tapering from next month.

* The Fed's $85 billion monthly bond purchases have boosted gold prices in recent years as they increase the metal's inflation hedge appeal.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 4.50 tonnes to 852.21 tonnes on Friday, their lowest since February 2009. It was the sharpest drop since Nov. 1.

* Hedge funds and money managers cut bullish bets in futures and options of U.S. gold and silver for the week ended Nov. 19, a report by the Commodity Futures Trading Commission showed on Friday.

* Eligible gold stocks sitting inside U.S. exchange warehouses have risen to a seven-month high, a sign that physical demand has weakened.

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MARKET NEWS

* The yen started the new week at four-year lows versus the euro and a four-month trough on the dollar, while oil prices fell sharply after Iran and six world powers sealed a deal curbing its nuclear programme.

DATA/EVENTS (GMT) 0745 France Business climate 0900 Italy Trade balance 1358 U.S. Markit Services PMI 1500 U.S. Pending home sales 1530 U.S. Dallas Fed manufacturing index

PRICES AT 0022 GMT

Metal Last Change Pct chg YTD pct chg Spot gold 1239.84 -3.15 -0.25 -25.96 Spot silver 19.66 -0.2 -1.01 -35.07 Spot platinum 1376.99 -0.81 -0.06 -10.29 Spot palladium 713.97 1.61 0.23 3.17 Comex gold Dec3 1239.7 -4.4 -0.35 -26.02 Comex silver Dec3 19.68 -0.17 -0.89 -35.05 Euro 1.3552 DXY 80.682

COMEX gold and silver contracts show the most active months

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)