PRECIOUS-Gold falls as ETF outflows weigh; palladium tumbles

Mon Apr 21, 2014 3:45pm EDT

* Lack of new reports of Ukraine violence triggers selling

* Investors spooked after recent gold ETF outflows

* Australia, Hong Kong, London closed for Easter

* Coming up: U.S. existing home sales Tuesday (Adds updated prices and market activity)

By Frank Tang and A. Ananthalakshmi

NEW YORK/SINGAPORE, April 21 (Reuters) - Gold prices fell to a nearly three-week low on Monday as sharp outflows from the world's biggest bullion-backed exchange-traded fund (ETF) and the lack of a further increase in geopolitical tension prompted selling.

Palladium slid more than 2 percent on follow-through weakness after South Africa's biggest platinum producers last week offered to raise wages for miners in a bid to end a widespread mining strike.

Silver also fell more than 1 percent, weighed down by the decline in platinum group metals.

In Ukraine, an agreement reached last week to avert wider conflict was faltering as the new week began, with pro-Moscow separatist gunmen showing no sign of surrendering the government buildings they have seized. However, no new violence was reported Monday.

"Some of the problems have subsided over the conflict between Russia and Ukraine. The climax of tensions is probably behind us at least for now," said Phillip Streible, senior commodities broker at RJ O'Brien in Chicago.

Spot gold was down 0.4 percent at $1,288.72 an ounce at 3:17 p.m. EDT (1917 GMT), having earlier hit $1,281.40, less than $5 above a two-month low of $1,277.29.

U.S. COMEX gold futures for June delivery settled down $5.40 at $1,288.50 an ounce. Trading volume was less than 100,000 lots, sharply below its 30-day average of 170,000 contracts, preliminary Reuters data showed.

The London market was shut on Monday for a bank holiday, while U.S. traders returned to their desks after the Good Friday holiday. In addition, Australia, Hong Kong and London were closed on Monday for the Easter holiday.

Analysts said that some investors in gold have been spooked by last week's significant outflows from gold ETF holdings.

SPDR Gold Trust, the world's top gold ETF and a good measure of investor sentiment, saw outflows of 9.3 tonnes.

Before last week, the fund - closely watched due to the size of its holdings - had gained 6.2 tonnes since the beginning of 2014.

Silver slid in tandem with losses in gold and platinum group metals, falling 1.2 percent to $19.36 an ounce. Due to Monday's drop, silver has reversed its gains and is lower on the year.

In physical market news, China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases discreet at a time when it might be boosting official reserves.

In gold mining news, sources told Reuters that talks between Barrick Gold Corp and Newmont Mining Corp over a combination that would create a gold mining behemoth have hit a snag, but the companies remain keen on a deal and discussions are likely to resume.

Among platinum group metals, platinum slipped 0.8 percent to $1,393.30, while palladium dropped 2.1 percent to $777.55 an ounce. 3:17 PM EST LAST/ NET PCT LOW HIGH CURRENT

SETTLE CHNG CHNG VOL US Gold JUN 1288.50 -5.40 -0.4 1281.80 1302.50 95,843 US Silver MAY 19.351 -0.245 -1.3 19.230 19.705 30,848 US Plat JUL 1400.70 -28.00 -2.0 1399.80 1418.20 9,499 US Pall JUN 777.80 -29.30 -3.6 766.90 802.00 5,474 Gold 1288.72 -4.93 -0.4 1282.30 1300.90 Silver 19.360 -0.230 -1.2 19.280 19.690 Platinum 1393.30 -11.50 -0.8 1401.00 1415.00 Palladium 777.55 -16.45 -2.1 773.75 800.15 TOTAL MARKET VOLUME 30-D ATM VOLATILITY

CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 98,949 170,351 174,863 16.3 0.28 US Silver 39,540 50,994 59,341 21.2 -1.42 US Platinum 9,585 14,023 12,290 15.84 -1.15 US Palladium 5,552 5,948 5,931 27.25 -2.55 (Editing by Joseph Radford, Muralikumar Anantharaman, Sunil Nair, Andrew Hay and Peter Galloway)