* Spot gold may test resistance at $1,222/oz -technicals
* Dollar index off 13-1/2-year high touched last week
* Palladium hits strongest in over 3 months
* SPDR Gold holdings drop 0.7 percent on Monday (Adds comment, detail; updates prices)
By Apeksha Nair
Nov 22 (Reuters) - Gold prices climbed for a second day on Tuesday, buoyed by an easing U.S. dollar and physical buying in Asia.
Spot gold XAU= was up 0.3 percent at $1,217.35 an ounce by 0628 GMT. The previous day, it advanced 0.4 percent to snap three sessions of losses.
U.S. gold futures GCcv1 were up 0.64 percent at $1,217.50 per ounce, after earlier rising as high as $1,220.90.
"Gold prices have factored in the December (U.S. rate hike) move. Now it is a matter of bargain-hunting," said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore.
"We are seeing a lot of activity in Southeast Asia. The drop in prices and inverse pricing against the local currency are driving the buying."
Gold has fallen more than $120 an ounce from its post-U.S. election peak on Nov. 9 as U.S. Treasury yields posted their biggest two-week rise in more than five years and the dollar shot higher.
But the U.S. dollar weakened on Tuesday, supporting bullion.
The dollar index .DXY , which measures the greenback against a basket of major currencies, slipped 0.15 percent to 100.910, falling further after snapping a 10-day rising streak on Monday. USD/
"Gold kept its head above water, with technical-based buying supporting the market. However, with the market increasing bets on a December rate hike in the U.S., this buying is unlikely to persist in the short term," ANZ analysts said in a note."
Gold is highly-sensitive to rising interest rates which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
"We still expect gold to struggle against a host of bearish elements that remain arrayed against it, including a stronger dollar, soaring equity markets and the prospect of further rate hikes that could follow the widely-expected increase slated for next month," INTL FCStone analyst Edward Meir said in a note.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , said its holdings fell 0.71 percent to 908.77 tonnes on Monday. Holdings have fallen 3.6 percent so far this month. GOL/ETF
Goldman Sachs (NYSE:GS) on Monday lowered its three- and six-month gold price forecasts to $1,200 per troy ounce and said downside risks remain from potential physical ETF liquidation. gold XAU= may test resistance at $1,222 per ounce, a break above which could lead to a gain to $1,235, according to Reuters technicals analyst Wang Tao. XAG= rose 1.3 percent at $16.77 an ounce and platinum XPT= was 1.3 percent higher at $947.00.
Palladium XPD= was up 0.93 percent at $734.90, after earlier touching its strongest since Aug. 10 at $736.20.