* Gold briefly cuts losses during Kerry TV address
* Gold on track for 5.6 percent monrhly gain
* Dollar rises to 4-week high on downbeat euro data
* U.S. markets closed Monday for Labor Day holiday
(New throughout, updates prices and market actvity; changes
By Carole Vaporean
NEW YORK, Aug 30 Gold slid below $1,400 an ounce
on Friday as the dollar rallied to a four-week high and
investors squared positions at the end of the month and cashed
in on a recent run-up ahead of a long U.S. holiday weekend.
Gold, which remained on track for a 5.6 percent monthly
gain, briefly trimmed its decline in the afternoon as U.S.
Secretary of State John Kerry was making a broad case for U.S.
military action against Syria. But prices fell back to
pre-speech level before he finished his televised address.
Kerry made a case for limited U.S. military action against
Syria for its suspected use of chemical weapons, saying it could
not go unpunished for such a "crime against humanity." But he
said any U.S. action would be carefully tailored and would not
in any way resemble the invasions of Afghanistan and Iraq.
Spot gold was down 0.83 percent at $1,395.91 an ounce
by 1:51 EDT (1751 GMT), after slipping to a session low of
$1,392.06 an ounce. During Kerry's address, gold had retraced
some losses and was about 0.40 percent lower.
U.S. gold futures for December delivery traded $16.90
an ounce lower at $1,396 an ounce, down 1.20 percent.
The precious metal slid below $1,400 an ounce early, as the
dollar rallied to a four-week high against the euro following
soft euro zone economic readings.
"Gold is under pressure from a firm U.S. dollar and lower
oil prices after the West debates whether to attack Syria,"
Commerzbank analyst Eugen Weinberg said.
While tensions over Syria kept investors on edge, James
Steel, chief precious metals analyst at HSBC in New York said
month-end book squaring and the upcoming long U.S. weekend was
likely adding volatility to the market.
"Geopolitical rallies tend not to buoy the market unless
there's further deterioration. In this case, it would be
military action," Steel said.
As of Wednesday, the latest rally had lifted gold to a 3-1/2
month high of $1,433.31. Bullion was headed for its second
straight monthly gain, a rally that analysts said was driven
largely by investors covering short positions.
"The move higher in August was driven mostly by
short-covering and opportunistic buying, which seems to have now
run out of steam," VTB Capital analyst Andrey Kryuchenkov said.
The U.S. dollar rose to a four-week high against a
basket of major currencies, helped by the persistent uncertainty
about Syria and a weak euro that has struggled in the wake of
soft euro zone economic data.
Data showing the pace of business activity in the U.S.
Midwest rose to 53.0 from 52.3 in July, matching economists'
expectations, also helped the dollar and pressured gold.
But the index for prices paid within the Midwest series rose
to its highest since November. Analysts said they made note of
the inflation signal as feeding into expectations the Federal
Reserve could soon taper its monetary stimulus.
An earlier report, however, a soft consumer spending reading
ticked up just 0.1 percent, less than an expected 0.3 percent
Investors are scrutinizing economic data to gauge the
strength of economic recovery to better estimate when the U.S.
central bank will begin curbing its $85 billion per month
An early end to the stimulus could stunt demand for assets
like gold that had been boosted by central bank liquidity over
the past four years.
Brent crude oil slipped below $115 a barrel after
strong gains earlier in the week. The positive correlation
between gold and oil has risen in the past few sessions as gold
is seen as a hedge against oil-led inflationary pressures.
Higher gold prices in August deterred buyers who splurged on
jewellery, bars and coins earlier this year.
In Hong Kong gold kilo bar premiums declined to $2.50 an
ounce from $5 two weeks ago. Tokyo premiums fell to 50 cents
from $1.50. Those in Singapore dropped to $1.50.
Silver declined 1.64 percent to $23.44 an ounce. Spot
platinum rose to $1,518.20 an ounce, while spot palladium
fell 1.91 percent to $719.97 an ounce.
(Additional reporting by Josphine Mason in New York, Clara
Denina in London, A. Ananthalakshmi in Singapore; Editing by
William Hardy, Jane Baird and David Gregorio)