* Robust physical demand seen
* Offsets pressure from equity markets, drop in ETF holdings
* ETF holdings plunge to lowest since early 2009 (Updates with prices and details)
By Clara Denina
LONDON, May 8 (Reuters) - Gold extended gains on Wednesday as the dollar weakened and robust physical demand offset negative pressures from strong equity markets and a drop in exchange-traded fund holdings to their lowest in four years.
The prospect of surging demand from China in coming months, after net gold inflows from Hong Kong hit a record in March, may further support bullion prices, which have been hurt by sagging investor confidence in the metal this year.
"Stronger equities and ETF liquidation put pressure on prices yesterday, but also bolstered physical buying in Asia overnight," MKS Capital head of trading Afshin Nabavi said.
"We don't have much macro news coming out this week, and that should leave the metal in a range between $1,440 and $1,480."
Spot gold rose as much as 1.2 percent to a session high of $1,469.90 an ounce and was later seen at $1,468.20 by 1234 GMT, still up 1.1 percent. It fell nearly 2 percent in the previous session, when investors shifted to equity markets.
U.S. gold futures for June delivery rose 1.3 percent to $1,467.60 an ounce.
"It is most likely that gold will still move against the greenback in thin volumes this week," VTB Capital said in a note.
The dollar fell further against the euro after an unexpected rise in German industrial output. It followed surprisingly strong industrial orders on Tuesday.
European equities were boosted on Wednesday by signs of a better outlook for China after trade data showed a steady recovery in the world's No.2 economy. German and U.S. stocks hit all-time highs on Tuesday.
"Given the reduction of tail-risk in Europe, the rising labour market in the U.S. and the low inflation rate, investors prefer equities to gold in the near term," Sharps Pixley said in a note.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.42 percent to 1,057.79 tonnes, or 34 million ounces on Tuesday, the weakest since early 2009.
Cash gold has dropped more than 13 percent so far this year, after posting annual gains in the past 12 years as easy monetary policy prompted investors to buy bullion.
TIGHT PHYSICAL MARKET
The physical market remained tight given a recent surge in demand for gold bars, coins and nuggets, but some analysts said volumes had come off slightly after a recent rush in Asian countries.
"Our index of India physical flows continues to suggest demand that is well above average, but volumes have come off the peak of the previous two weeks," UBS said in a note.
The physical market in Singapore was also less active this week, dealers said.
In other precious metals, silver rose 0.2 percent to $23.95 an ounce, while platinum rose 1.1 percent to $1,492.49 an ounce.
Palladium rebounded from the previous session's losses as Norilsk Nickel, the world's largest producer of metal, reported a nine percent fall in first quarter production. It stood at $688, up 1.4 percent. (Additional reporting by Lewa Pardomuan in Singapore; Editing by Jane Baird)
