* Gold up 7 percent for the month
* Technicals point to drop in prices
* Physical demand weak, selling picks up
By A. Ananthalakshmi
SINGAPORE, Aug 30 Gold held steady on Friday as
the probability of an immediate military strike on Syria faded,
and strong U.S. data rekindled fears of an imminent scale-back
of the Federal Reserve's stimulus measures.
Spot gold was little changed at $1,406.99 an ounce by
0638 GMT, treading water after ending a five-day rally the
previous day. Gold had risen to a 3-1/2 month high of $1,433.31
The metal is headed for its second straight monthly gain,
helped largely by short-covering and technical buying that
pushed it above the key $1,400 level this week.
"Looks like the market is running out of steam at these
levels," said one Singapore-based gold trader. "If it cannot
hold above $1,400 today, it will surely see a sharp drop."
"We have seen quite a sharp slowdown in physical buying."
Strong U.S. data also bolsters the case for the tapering of
the Fed's massive stimulus that pushed gold to above $1,900 an
ounce in 2011.
U.S. gross domestic product grew at a 2.5 percent annual
rate in the April-June period, more than double the pace clocked
in the prior three months. The number of Americans filing new
claims for jobless benefits fell last week, a potential sign of
faster hiring in August.
Gold's safe-haven appeal was also dimmed after U.S.
officials conceded on Thursday they lacked conclusive evidence
that Syrian President Bashar al-Assad personally ordered last
week's poison gas attack on civilians.
Gold prices have risen $1,400 for the first time in more
than two months, deterring buyers had splurged on jewellery,
bars and coins earlier this year.
In Hong Kong - the key gold supplier to China - gold kilo
bar premiums declined to $2.50 an ounce from $5 two weeks ago.
Tokyo premiums fell to 50 cents from $1.50, while those in
Singapore dropped to $1.50.
Dealers said there has been a lot of selling in the physical
markets in Asia as consumers look to profit from the higher
Precious metals prices 0638 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1406.99 -0.65 -0.05 -15.98
Spot Silver 23.69 -0.14 -0.59 -21.76
Spot Platinum 1515.50 1.80 +0.12 -1.27
Spot Palladium 734.00 0.02 +0.00 6.07
COMEX GOLD DEC3 1407.60 -5.30 -0.38 -16.00 18102
COMEX SILVER SEP3 23.71 -0.38 -1.60 -21.78 298
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and