PRECIOUS-Gold steady as dollar slips after U.S. government shutdown

* Dollar near 3-yr lows but equities shrug off shutdown
* SPDR Gold holdings rose over 2 percent last week
* Platinum hits highest since early September

(Updates prices)
By Maytaal Angel
LONDON, Jan 22 (Reuters) – Gold steadied on Monday as the
dollar wallowed near three-year lows following a U.S. government
shutdown, although bullishness in the wider financial markets
capped the precious metal’s gains.

World stocks shrugged off the shutdown in Washington, with
investors seemingly confident the conflict between President
Donald Trump and Democrats can be resolved swiftly.

“We did see gold reach four-month highs last week on fears
an agreement wouldn’t be reached and indeed that came to pass.
The fact that gold is a bit soft this morning suggests it was
largely in the price,” said Mitsubishi analyst Jonathan Butler.
Spot gold was flat at $1,331.61 an ounce by 1250 GMT.

The precious metal fell 0.5 percent last week, its first weekly
decline in six weeks, having hit four-month highs last Monday.

U.S. gold futures were down 0.1 percent at
$1,331.70.

Keeping a lid on gold’s gains, U.S. Treasury yields rose as
investors saw limited economic fallout from the standoff in
Washington and instead focused on a global economy motoring
ahead.

Rising yields tend to weigh on gold by increasing the
opportunity cost of holding non-yielding bullion. They also tend
to boost the dollar, making dollar-priced gold costlier for
non-U.S. investors.

The U.S. government shutdown entered its third day on
Monday, with the senate set to vote at 12 p.m. (1700 GMT) on
advancing a measure to provide temporary government funding
through Feb. 8 and end the shutdown.

Analysts at Julius Baer sounded a note of caution.

“While the dollar is unlikely to return to its peak, we
still see upside from current levels as accelerating growth
should be accompanied by rising interest rates in the United
States. This should weigh on gold over the coming months,” they
said in a note.

Holdings of SPDR Gold Trust, the world’s largest
gold-backed exchange-traded fund, rose over 2 percent last week,
their best week since the week ended Sept. 3.

Among other precious metals, spot silver was down 0.2
percent at $16.97 an ounce.

Platinum rose 0.2 percent to $1,015.10 an ounce,
after touching its highest since Sept. 8 at $1,018.80.

“Platinum has once again narrowed the price gap to palladium
to below $100 per troy ounce,” said Commerzbank in a note.

Palladium fell 0.7 percent to $1,097.10 an ounce. It
touched record highs last week at $1,138.

Flows of palladium out of UK stocks to Hong Kong are picking
up as demand from Asian industry grows.