* Gold forming an inverted head-shoulder pattern-SocGen
* Palladium hits record high at $1,111.40/oz Tuesday
* Platinum off 3-1/2-month peaks marked on Monday
(Adds EFT flows, updates prices) LONDON, Jan 9 (Reuters) - Gold drifted lower on Tuesday, weighed down by a firmer dollar on the back of concerns about instability in Europe, while a buoyant stock market also sapped enthusiasm for bullion.
Spot gold was down 0.8 percent at $1,309.83 an ounce
at 1500 GMT. Last week, prices touched their strongest since Sept. 15 at $1,325.86.
U.S. gold futures fell 0.7 percent to $1,310.70 an
ounce. The dollar hit a more than one-week high against a basket of
other major currencies on Monday . It was up 0.2 percent
on Tuesday, making commodities priced in the greenback more expensive for buyers using other currencies. "The dollar has bounced back, partly due to weakness in the euro," said Jonathan Butler, commodities analyst at Mitsubishi in London. The euro is down due to concerns about upcoming Italian elections, problems forming a government in Germany and lingering concerns about Brexit, he added. "There's also the continuing rally in the equity markets. All of that has probably helped take the wind out of gold's sails," Butler said. Over the next few days, gold may extend losses to around $1,300 and the 100-day moving average around $1,290, he added. Other analysts expect gold to bounce back. Stéphanie Aymes, head of technical analysis at Societe Generale, said gold has been forming an inverted head and shoulder pattern, which is bullish. "A clear move above $1,356 will mean confirmation of the formation and this will lead to next leg of up move towards $1,433/1,485 first," she said in a note. Global gold-backed exchange-traded funds added 197.5 tonnes in 2017, an 8.4 percent increase, the World Gold Council said.
"The gold price was clearly finding support from inflows ... into gold ETFs, meaning that inflows since the start of the year have totalled almost six tonnes," Commerzbank said in a note.
Among other precious metals, spot silver fell 1.2
percent to $16.94 an ounce.
Platinum dropped 0.8 percent to $964.30 an ounce,
after hitting a 3-1/2 month peak on Monday at $973.60.
Palladium was up 0.3 percent at $1,104.22 an ounce
after touching a record high of $1,111.40. "Now that we're above $1,100, there's the potential for profit taking - some of the longs are getting rather extended on Comex," Butler said. "But the speculative froth aside, we're still in a very strong fundamental market and those fundamentals should keep prices pretty well supported over the next few months."
(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Edmund Blair and Louise Heavens)