* Specs increase net short positions in gold to highest in 3 weeks
* Platinum scales more than 4-month peak
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl (Recasts, updates prices, adds quotes)
By Sumita Layek
BENGALURU, Nov 5 (Reuters) - Gold fell on Monday as investors took some profits following a rally over the past week, but the market is cautious ahead of the U.S. midterm elections this week.
Spot gold was down 0.3 percent at $1,229.03 per ounce by 1416 GMT, while U.S. gold futures was 0.2 percent lower at $1,230.50 per ounce.
"Gold had quite a move over the past few weeks... we have seen a reduction in net-short positions because of uncertainties, but over the last week, we've seen a spurt again. So I think we're seeing some profit taking," ING analyst Warren Patterson said.
Hedge funds and money managers raised their net short position in gold by 18,723 contracts to 45,622 contracts in the week to Oct. 30, according to U.S. Commodity Futures Trading Commission data. This was the highest in three weeks.
Investors kept a close eye on the U.S. midterm elections which may fuel interest in bullion as a hedge against risk if the result sparks volatility in the wider financial markets.
"We are just a day away from the U.S. midterm election, the outcome of which could have an impact both on currencies and several asset classes...," said Saxo Bank analyst Ole Hansen.
Opinion polls show a strong chance that the Democratic Party may win control of the House of Representatives in the elections on Tuesday after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.
"Should the Democrats surprise, we would expect pressure on the dollar and a move higher in the metals complex. Republican control of the both the House and Senate should create selling pressure," Peter Hug, global trading director at Kitco Metals, said in a note.
Gold is down more than 5 percent this year, with investors turning to the dollar as a haven from risk as a U.S. trade war with China unfolded, and as higher U.S. interest rates offered more attractive returns than the non-yielding metal.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.23 percent to 759.06 tonnes on Friday, data from the fund showed.
Among other precious metals, silver was down 0.4 percent at $14.66 per ounce and palladium dipped 0.9 percent to $1,126.40.
Platinum fell 0.2 percent to $865.40 per ounce, having earlier hit its the highest since June 25 at $873.
The gains in platinum could chiefly be attributed to short covering, considering the CFTC data, which showed "net short positions have been almost entirely reduced", Commerzbank analysts said in a note. (Reporting by Sumita Layek and Karthika Suresh Namboothiri in Bengaluru; Editing by Louise Heavens/Jan Harvey/Jane Merriman)