PRECIOUS-Gold, silver fall as dollar gains; ETF holdings drop

SINGAPORE, May 21 (Reuters) - Gold drifted lower for an eighth session out of nine on Tuesday on outflows from exchange-traded funds and as the dollar firmed, putting more pressure on bullion which has already lost nearly a fifth of its value this year. Silver also dropped, after recovering from Monday's early dive when it hit 2-1/2-year lows. FUNDAMENTALS * Spot gold had fallen 0.4 percent to $1,387.86 an ounce by 0042 GMT. The price rose 2.6 percent on Monday after a seven-session slide -- the metal's longest losing streak since March 2009. * U.S. gold futures gained 0.2 percent to $1,386.60. * Growing fears the U.S. Federal Reserve could soon halt its bond-buying programme has also trimmed gold's appeal as an inflation hedge. * Charles Evans, president of the Federal Reserve Bank of Chicago, said the Fed could continue on its bond-buying programme through the summer, but end it abruptly in the autumn if by then it is confident that the improvement in the jobs outlook is here to stay. * Spot silver fell 1.1 percent to $22.67, not far off Monday's low of $20.84. Spot silver closed up 3 percent overnight after falling as much as 6 percent. * U.S. silver futures were up 0.3 percent at $22.65 an ounce after sliding by up to 9 percent during the early sell-off in Asia on Monday. * SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings stood at 1,031.50 tonnes on Monday, the lowest in more than four years. * Holdings of the largest silver ETF, the iShares Silver Trust are at the lowest since mid-January. * India, the world's top gold consumer, will take more steps if necessary to curb gold imports after the country's overseas purchases of gold and silver shot up 138 percent in April. MARKET NEWS * The dollar gained versus a basket of currencies after retreating broadly on Monday as traders pared back expectations Fed Chairman Ben Bernanke would hint at tapering U.S. bond purchases this week. DATA/EVENTS (GMT) 0600 Germany Producer prices 1145 U.S. ICSC weekly chain store sales 1255 U.S. Redbook weekly retail sales Precious metals prices 0042 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1387.86 -5.18 -0.37 -17.12 Spot Silver 22.67 -0.25 -1.09 -25.13 Spot Platinum 1478.50 -9.00 -0.61 -3.68 Spot Palladium 743.47 -3.53 -0.47 7.44 COMEX GOLD JUN3 1386.60 2.50 +0.18 -17.26 5068 COMEX SILVER JUL3 22.65 0.06 +0.28 -25.09 1431 Euro/Dollar 1.2880 Dollar/Yen 102.44 COMEX gold and silver contracts show the most active months (Reporting by A. Ananthalakshmi; Editing by Manolo Serapio Jr. and Joseph Radford)