* U.S. GDP falls 2.9 pct in Q1, worst in five years
* Platinum up on lingering worries as workers return
* Coming up: U.S. personal income, jobless claims Thurs
(Adds comment, second byline, dateline, updates market
By Frank Tang and Jan Harvey
NEW YORK/LONDON, June 25 Gold rose slightly on
Wednesday after U.S. growth data came in weaker than expected,
hitting the dollar, but bullion's failure to extend gains
suggested some investors were taking profits after prices hit a
two-month high in the previous session, traders said.
The yellow metal's appeal as a hedge increased after data
showed the U.S. economy contracted at a much steeper pace in the
first quarter than previously estimated, turning in one of its
worst-ever non-recession performances.
Gold has gained almost 4 percent in the last four sessions
to Tuesday's two-month high at $1,325.90. Bullion prices rose on
fears the Iraq conflict could escalate and a perceived lack of
commitment by the Federal Reserve to raise interest rates,
triggering a heavy bout of short covering.
"The market needed a big washout on the upside to get it
back to a semblance of normality," said David Govett, head of
precious metals at Marex Spectron. "Now it has done enough, and
there is no particular reason to buy it up here."
Spot gold was up 0.2 percent at $1,319.85 an ounce by
3:01 p.m. EDT (1901 GMT).
U.S. COMEX gold futures for August delivery settled
up $1.30 an ounce at $1,322.60, with trading volume about 10
percent below its 30-day average, preliminary Reuters data
Silver was up 0.4 percent at $20.95 an ounce.
Demand for gold was lackluster in Asia, home of the main
consumers of physical metal, with dealers reporting that
price-sensitive buyers had been put off by its latest rally,
The head of the state-backed Shanghai Gold Exchange (SGE)
said on Wednesday that China must have a bigger influence on the
global gold market as the top consumer of the precious metal, as
the country targets establishing its own pricing benchmark.
China, along with exchanges in Singapore and Hong Kong, are
launching gold contracts this year in a bid to tap a market
looking for a viable alternative to the metal's global benchmark
that is under regulatory scrutiny.
Spot platinum edged up 0.2 percent to $1,466.25 an
ounce, while spot palladium climbed 0.3 percent to $829
South African mine workers returned to the Marikana
operations of platinum producer Lonmin after wage deals
were signed to end a five-month strike.
However, analysts said looming job cuts could rekindle labor
unrest, underpinning platinum group metal prices.
3:22 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold AUG 1322.60 1.30 0.1 1305.40 1325.60 126,552
US Silver SEP 21.171 0.074 0.4 20.760 21.220 35,210
US Plat JUL 1473.20 1.30 0.1 1454.80 1477.70 13,712
US Pall SEP 833.25 2.85 0.3 822.30 834.75 2,946
Gold 1319.85 2.25 0.2 1311.00 1324.65
Silver 20.950 0.080 0.4 20.740 21.130
Platinum 1466.25 2.45 0.2 1454.00 1473.00
Palladium 829.00 2.70 0.3 823.45 832.75
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 135,454 145,203 163,861 13.35 0.06
US Silver 108,180 61,670 56,139 19.71 0.32
US Platinum 25,038 15,825 12,400 14.82 -0.59
US Palladium 3,007 7,636 5,885 19.56 -0.93
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by William Hardy and Nick Zieminski)