* US services, private employment data raises stimulus
* Early gains in gold vanish as ECB pledges low rates
* Chinese gold imports from Hong Kong rise in July
(Updates prices, adds comment)
By Barani Krishnan and Jan Harvey
NEW YORK/LONDON, Sept 5 Gold sank almost 2
percent to two-week lows on Thursday as upbeat U.S. economic
data heightened expectations the U.S. Federal Reserve may soon
rein in its massive stimulus program that has bolstered bullion
The European Central Bank's pledge to keep interest rates
low reversed early gains in bullion, while a lack of progress in
any U.S. military action against Syria further weighed on the
precious metal's safe-haven status.
Selling in gold accelerated and pushed prices down to
$1,364.91 an ounce, their lowest level since Aug. 22, after data
showed growth in the U.S. services sector accelerated in August
to its fastest pace in almost eight years.
That came on top of news that private employers added
176,000 jobs in August and new claims for jobless benefits fell
to a near five-year low last week.
Those numbers suggested the labor market - a key for Fed
decisions - is in a slow-but-steady recovery and the central
bank may be convinced to trim its monthly purchases of $85
billion in Treasuries and mortgage-backed securities.
Official U.S. jobs data for August is due on Friday.
By 4:00 p.m. EDT (2000 GMT), the spot price of gold
was down 1.6 percent at $1,368.01 an ounce, adding to
Wednesday's 1.5 percent drop.
U.S. gold futures for December delivery settled down
$17, or 1.2 percent, at $1,373 an ounce.
"I think gold really took a hit on today's economic data,"
said David Lee, vice president of trading at Heraeus Precious
"The possibility of Fed stimulus tapering starting in
September, or even by December, is really a concern now with the
better services sector and preliminary jobs reading for August."
This year's 15 percent drop in gold has been driven largely
by speculation the Fed will start reducing its stimulus program
with an announcement at its Sept 17-18 meeting.
"Everyone is trying to pre-judge what the Fed might do,"
Citi analyst David Wilson said. "So, if the employment numbers
are better than expected it will heighten the sense that
tapering will be sooner rather than later, and the reverse if
the data's below expectations."
MIDEAST TENSIONS DISSIPATE
Safe-haven buying that took gold to 3-1/2 month highs last
week has also waned on reduced expectations over a U.S.-led
military strike against Syria after last month's chemical
weapons attack on civilians in that country.
Hong Kong's gold exports to China rose to 129.232 tonnes in
July from 111.718 tonnes in June, data from the Hong Kong
government showed on Thursday.
Silver was down 1.1 percent to $23.18 an ounce, while
spot platinum was down about 1 percent to $1,479.24 an
ounce. Spot palladium was down 1.6 percent at $684.47 an
Platinum miners in South Africa, the source of
three-quarters of world platinum supply, are watching the
progress of pay negotiations in the gold sector.
Shares of South African gold producers rose more than 4
percent on Thursday as investors bet unions and management would
soon reach an agreement over wages, ending a strike by tens of
thousands of miners.
"The more compromising tone struck by the (National Union of
Mineworkers) seemed to have had more impact on platinum, in
terms of bringing prices down by nearly 3 percent in yesterday's
trading, as opposed to gold, which fell only 1.5 percent,"
Mitsubishi analyst Jonathan Butler said.
(Reporting by Barani Krishnan and Josephine Mason in New York;
Editing by William Hardy, Chris Reese and Jim Marshall)