* Gold steady after 0.5 pct drop overnight
* Dollar, Asian shares edge higher
* SPDR fund sees more outflows
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Sept 22 (Reuters) - Gold steadied below a near
three-week high on Tuesday, retaining overnight losses as Asian
equities and the dollar edged higher and as investors worried
over the possibility of a U.S. interest rate hike later this
year.
Spot gold XAU= was little changed at $1,133.01 an ounce by
0634 GMT, after a 0.5 percent drop on Monday. The metal had
climbed to a near three-week high of $1,141.50 last week.
Asian shares rose on Tuesday and the dollar held steady as
U.S. markets bounced back and the European Central Bank said it
was prepared to ease monetary policy further, denting bullion's
appeal as a hedge. MKTS/GLOB
Comments from Federal Reserve officials on Monday signalled
that the U.S. central bank could still hike rates later this
year, a move that could lower demand for non-interest-paying
gold, after standing pat at last week's policy meet.
"We are quite concerned that the Fed's message has come
through as relatively muddled this past week given that most
governors have expressed a willingness to raise rates by
year-end," said INTL FCStone analyst Edward Meir.
The uncertainty in various asset classes as investors move
to the sidelines ahead of the Fed's policy meets in October and
December could help support gold prices to an extent, he said.
Atlanta Fed President Dennis Lockhart said on Monday last
week's decision was largely a "risk management" exercise to be
sure recent market volatility would not become a drag on the
U.S. economy. He said he still expects the Fed to hike rates
later this year.
St. Louis Fed President James Bullard said there is "a
powerful case to be made" for beginning to tighten policy and
that there is "a chance" the Fed could lift rates at its October
meeting.
The market is now waiting to hear from Fed Chair Janet
Yellen herself, who is due to speak on Thursday. Yellen is
facing growing pressure from her colleagues and global investors
to clarify where the Fed is heading and how it is making its
decisions.
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.53 percent to
674.61 tonnes on Monday, reflective of investor sentiment. That
is the first decline in nearly two weeks. GOL/ETF
PRICES AT 0634 GMT
Metal Last Change Pct chg
Spot gold 1133.01 -0.09 -0.01
Spot silver 15.15 -0.01 -0.07
Spot platinum 969.65 3.65 0.38
Spot palladium 610.85 -0.15 -0.02
Comex gold 1132.7 -0.1 -0.01
Comex silver 15.18 -0.041 -0.27
Euro 1.1161
DXY 96.05
COMEX gold and silver contracts show the
most active months