PRECIOUS-Gold drops towards 6-year low on dollar, US rate hike view

* Fed's Williams says "strong case" for December rate hike
* Dollar index hits 8-month high
* Hedge funds switch to bearish positions on COMEX
* Platinum hits fresh 7-year lows

(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Nov 23 (Reuters) - Gold fell 1 percent on
Monday, nearing last week's 2010 low on a robust dollar and
upbeat comments from Federal Reserve officials on a possible
U.S. rate hike next month.
White metals tracked gold lower, with silver dropping to the
lowest level in more than six years and platinum to a seven-year
trough.
Spot gold XAU= was down 0.9 percent at $1,068 an ounce at
3:00 p.m. EST (2000 GMT), down for a 13th of the 16 trading days
so far this month. Its session low was $1,066.60, just shy of
last week's lowest since February 2010 at $1,064.95.
U.S. gold futures for December delivery GCA5 settled down
0.9 percent at $1,066.80 an ounce after hedge funds and money
managers switched to a bearish position.
The dollar .DXY rose as much as 0.4 percent against a
basket of six major currencies to an eight-month high after San
Francisco Fed President John Williams cited a "strong case" for
raising interest rates in December as long as U.S. economic data
does not disappoint. USD/
The euro fell on expectations that the European Central Bank
will ramp up its monetary stimulus next month.
A strong U.S. currency makes dollar-denominated gold more
expensive for foreign holders while higher U.S. interest rates
increase the opportunity cost of holding non-yielding assets
such as gold.
"I wouldn't be surprised to see prices fall below $1,000 as
expectations of a rate hike affect sentiment," Natixis analyst
Bernard Dahdah said.
"There have been substantial outflows from ETFs and central
bank demand only shows additions from gold-producing countries,
so generally speaking fundamental demand isn't really there to
support prices."
Assets in SPDR Gold Trust, the world's top gold-backed
exchange-traded fund (ETF), slid 0.18 percent to 660.75 tonnes
on Friday, the lowest since September 2008. GOL/ETF
"The dollar is strong, short-term interest rates are rising,
but the nervousness about going short is that everyone knows
that's bad for gold and how much of it is priced in," Macquarie
analyst Matthew Turner said.
Silver XAG= fell as much at 2.2 percent to $13.86 an
ounce, the lowest since August 2009 while platinum XPT= fell
1.5 percent to a seven-year low of $839.50 an ounce on worries
about demand.
"The strengthening U.S. dollar along with the rising
Treasury yields have increased the cost of carry for all
precious metals, and has convinced inventory holders to be
increasingly willing to part with their hoard," TD Securities
said in a note.
Palladium XPD= fell 4.4 percent to $535.25 an ounce.