PRECIOUS-Gold at 3-week low as U.S. stocks, Treasury yields climb

    * Markets closed for holiday in much of Asia, Europe
    * U.S. stocks, gauge of key world equity indexes rise
    * Platinum falls to 4-month low, silver at 7-week low
    * Coming up: Fed meeting Tuesday and Wednesday

 (Recasts, updates prices, adds comment)
    By Marcy Nicholson
    NEW YORK, May 1 (Reuters) - Gold prices fell 1 percent to a
three-week low on Monday, pressured by rising U.S. stocks and an
agreement that averted a U.S. government shutdown, dampening
demand for non-interest paying bullion.
    U.S. stocks were lifted by Apple shares hitting a record
high and a gauge of key world equity indexes also strengthened,
while Treasury yields rose.            
    "Risk appetite isn't collapsing here," said Bart Melek, head
of commodity strategy for TD Securities in Toronto.
    "Gold has been a little bit overdone here. It looks like
we're just trying to trend to the 200-day moving average."
    Spot gold        was down 0.8 percent at $1,257.58 an ounce
by 3:16 p.m. EDT (1916 GMT), after dropping to $1,253.66, the
lowest since April 11 and just above the 200-day moving average
at $1,251.93.
    U.S. gold futures         settled down 1 percent at
    Many financial markets in Asia and Europe were closed for
the May Day holiday. Tokyo markets will be closed for three days
from Wednesday for a string of holidays known as Golden Week,
and many investors take additional time off. 
    U.S. Congressional negotiators hammered out a bipartisan
agreement on a spending package to keep the federal government
funded through Sept. 30, averting a government shutdown.
    Gold briefly moved higher after U.S. construction spending
unexpectedly fell in March from a record high, government data
showed, while the Institute for Supply Management (ISM)
manufacturing employment index came in at the lowest since
    "The current level of the ISM Manufacturing Index is still
indicative of healthy growth in the sector, but it will be
important to see that level hold," said Royce Mendes, director
and senior economist at CIBC Capital Markets in Toronto.
    Traders said the market was waiting for  the Federal
Reserve's two-day policy meeting and the statement the central
bank will issue at 2 p.m. EDT (1800 GMT) on Wednesday following
the  meeting.            
    "We see gold maintaining a relatively higher trading range
in May as tensions with North Korea will command more attention
now that the bearish impact of the French election is out of the
way," said INTL FCStone analyst Edward Meir.
    North Korea suggested on Monday it will continue its nuclear
weapons tests.             
    Money managers increased their net long position in COMEX
gold contracts for the sixth straight week to April 25, U.S.
government data showed late Friday.             
    Spot silver        dropped 1.9 percent to $16.87 an ounce,
after falling to $16.78, matching the May 10 session low.
    Platinum        fell 1.7 percent to $927.25 an ounce, after
falling to a four-month low at $923.
    Palladium        was down 1.1 percent at $814.50 an ounce.

 (Additional reporting by Nallur Sethuraman and Swati Verma in
Bengaluru; Editing by Jeffrey Benkoe and Chizu Nomiyama)