* Gold extends losses after Monday's 0.5 pct drop
* European shares tumble 2.5 pct; oil, metals fall
* Largest gold-backed ETF reports outflows
(Updates throughout, changes dateline, previous SINGAPORE)
By Jan Harvey
LONDON, Sept 22 (Reuters) - Gold prices eased on Tuesday as
weakness in stocks and other commodities pulled the market
lower, though its losses were limited by some interest in the
metal as a haven from risk.
Expectations that the Federal Reserve will press ahead this
year with its first interest rate increase in nearly a decade
also weighed on the metal, dealers said.
Spot gold XAU= was down 0.3 percent at $1,130.26 an ounce
at 0943 GMT, while U.S. gold futures for December
delivery were down $2.90 an ounce at $1,129.90.
It outperformed the industrial precious metals, however,
with platinum XPT= down 1 percent at $956.25 an ounce,
palladium XPD= down 1.2 percent at $603.75 an ounce, and
silver XAG= down 1.2 percent at $14.98 an ounce.
"Gold still has these safe-haven characteristics on a day
like today, when everything that has a risk tag on it is just
going down - equities are going down, cyclical commodities are
going down," Julius Baer analyst Carsten Menke said. "That's
when gold starts to shine, at least a little bit."
European shares fell 2.5 percent on Tuesday, while oil
prices lost 2 percent and London copper struck a two-week low.
The dollar firmed against the euro after comments from Fed
officials revived expectations that U.S. rates will rise this
year, in contrast to speculation that the European Central Bank
may expand its stimulus programme.
The U.S. currency fell and gold rallied last week after the
Fed kept rates at ultra-low levels. Low rates cut the
opportunity cost of holding non-yielding bullion, while weighing
on the dollar.
Atlanta Fed President Dennis Lockhart said on Monday that
last week's decision was largely a "risk management" exercise,
and that he still expects a hike later this year. St. Louis Fed
President James Bullard said the Fed could lift rates at its
October meeting.
The market is waiting to hear from Fed Chair Janet Yellen,
who is due to speak on Thursday.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Shares GLD , said its holdings fell 0.53 percent to 674.61
tonnes on Monday, the first decline in nearly two weeks.
Switzerland's gold exports to China and Hong Kong combined
nearly doubled month-on-month in August, data from the Swiss
customs bureau showed.
Gold buying in China overnight was muted, dealers said.
"Shanghai was very quiet today," MKS said in a note. "(There
was) some light buying again as expected on the overnight dip
(but) it was not enough to have any effect on the spot market."