* U.S. economic growth accelerates in second quarter
* Dollar rallies; oil falls
* India considers plan for banks to buy gold from citizens
* Coming up: U.S. personal income data on Friday
(Updates market activity)
By Frank Tang and Clara Denina
NEW YORK/LONDON, Aug 29 Gold fell on Thursday,
snapping a five-day rally as a U.S.-led military strike on Syria
appeared not to be imminent and investors turned their attention
to strong U.S. economic growth and the Federal Reserve's plans
to rein in its stimulus program.
President Barack Obama told Americans on Thursday that a
military strike against Syria was in their interest following a
gas attack against Syrian civilians last week, and Britain said
armed action would be legal. But intervention appeared likely to
be delayed until U.N. investigators report back.
A U.S. government report showed the nation's economy
accelerated more quickly than expected in the second quarter
because of a surge in exports, bolstering the case for the
Federal Reserve to wind down a major economic stimulus program.
"Gold is down on better GDP and as the risk of imminent
military strikes is fading," said Frank McGhee, head precious
metals trader at Integrated Brokerage Services LLC. "The market
can sell off pretty hard tomorrow if we don't hear anything
concrete about attacks on Syria."
The metal's appeal as a hedge against inflation decreased
after the GDP data. Before Thursday's drop, gold rallied 5
percent in the last five sessions as rising geopolitical
tensions boosted safe-haven bids.
Spot gold was down 0.4 percent to $1,412 an ounce by
2:03 p.m. EDT (1803 GMT).
The metal is on track for its fourth consecutive weekly gain
and its second straight monthly rise.
U.S. Comex gold futures for December delivery settled
down $5.90 at $1,412.90 an ounce, with trading volume about 30
percent below its 30-day average, preliminary Reuters data
Gold came under pressure as the GDP data boosted the dollar
index and sent crude oil futures prices lower after their
recent sharp rally due to fears of supply disruptions from the
INDIA'S IMPORT CURBS
Demand for physical gold in Asia slowed this week as spot
prices surged and emerging-market currencies plunged. Premiums
in Singapore, Hong Kong and Tokyo all fell from two weeks ago.
India is considering a plan to direct commercial banks to
buy gold from ordinary citizens and divert it to precious metal
refiners in an attempt to curb imports and take some heat off a
plunging rupee, sources familiar with the Reserve Bank of India
India's Trade Minister Anand Sharma's talk of possible
monetization of India's gold holdings also weighed on gold
Analysts said that while bullion sales by India might
devastate gold prices, it was still unclear if the government
was committed to the drastic policy.
India, the world's biggest gold consumer, has already taken
a number of steps to lower its imports of the metal and reduce
its current account deficit.
Among other precious metals, silver fell 1.3 percent
to $24.03 an ounce, retreating from a 3-1/2 month high of $25.08
hit on Wednesday. Platinum dropped 0.8 percent to
$1,518.99 an ounce, while palladium was down 1.2 percent
at $734.22 an ounce.
2:03 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1412.90 -5.90 -0.4 1402.10 1418.60 133,156
US Silver SEP 24.090 -0.301 -1.2 23.660 24.415 18,232
US Plat OCT 1522.40 -17.70 -1.1 1518.80 1541.40 7,465
US Pall SEP 737.75 -8.30 -1.1 735.85 744.45 1,822
Gold 1412.00 -5.64 -0.4 1403.33 1417.91
Silver 24.030 -0.310 -1.3 23.700 24.400
Platinum 1518.99 -11.61 -0.8 1521.50 1537.00
Palladium 734.22 -8.78 -1.2 739.50 744.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 145,459 181,520 186,558 23.72 -0.46
US Silver 82,497 61,180 57,839 36.6 0.19
US Platinum 8,005 9,400 12,240 20.53 0.00
US Palladium 6,695 5,958 5,702
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Jason Neely, Jane Baird, Lisa Von Ahn and Jim