* Holdings of No. 1 gold ETF fall to lowest since June
* Indian traders fear curbs on overseas purchases
* GRAPHIC-2016 asset returns: reut.rs/1WAiOSC
(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Nov 16 (Reuters) - Gold eased on Wednesday
as the dollar climbed to a 14-year high against a currency
basket, extending a week-long rally driven by a surge in
Treasury yields after Donald Trump's election to the U.S.
presidency.
The metal has shed more than $100 an ounce from last
Wednesday's post-election high on the back of the sharp rise in
bond yields and burgeoning appetite for risk.
Spot gold was down 0.2 percent at $1,225.06 an ounce
by 2:05 p.m. EST (1905 GMT), while U.S. gold futures for
December delivery settled down 0.05 percent at $1,223.90.
"It's consolidating the Trump action here ... above $1,200,"
said Joe Foster, portfolio manager and strategist of VanEck
International Investors Gold Fund in New York.
"The dollar's a bit stronger today and gold's not changing
much so that to me is a sign of base building and
consolidation."
Major banks and investors have begun to debate the
possibility of another move towards parity between the dollar
and the euro, as the U.S. currency benefited from expectations
of an inflationary push from the incoming Trump administration.
"Gold is trying to stabilize despite continued headwinds
from rising real rates and a stronger dollar," Saxo Bank's head
of commodity research Ole Hansen said.
"Following the initial reset of expectations after the
election, the market will begin to ask questions about how much
of his pledges Trump will be able to carry out," he said.
Investors resumed post-U.S. election selling of bonds and
buying stocks on Wednesday after a pause earlier this week,
albeit less aggressively.
Gold is also expected to be feeling the pressure from an
imminent hike in U.S. interest rates, which are tipped to rise
for only the second time in nearly a decade next month.
It would need a surprise for the Federal Reserve not to
raise rates in December, one of the U.S. central bank's
policymakers, James Bullard, told reporters at a banking
conference on Wednesday.
Investor appetite for gold remained slack, with the world's
largest gold-backed exchange-traded fund, SPDR Gold Shares
, saying its holdings fell to a 4-1/2-month low on Tuesday.
In the major physical markets, some Indian gold traders are
placing bulk short-term import orders on fears that Prime
Minister Narendra Modi might soon curb overseas purchases of the
metal.
Silver was down 0.8 percent at $16.94 an ounce while
platinum turned up 0.9 percent at $943.5. Palladium
climbed by as much as 2.2 percent to a six-week high at
$721.40.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by
Louise Heavens and James Dalgleish)