| NEW YORK/LONDON
NEW YORK/LONDON Gold prices fell on Thursday, settling near one-week lows on the biggest daily percentage loss in six weeks, as some investors unwound safe-haven trades and automatic sell orders were set off when prices slid past $1,250.0 an ounce.
Gold fell early on improved U.S. labor market and international trade data, then losses accelerated in later trade.
Spot gold was bid at $1,243.70 an ounce by 3:56 p.m. EDT (1956 GMT), down about 1 percent from $1,254.50 late in New York on Wednesday -- the biggest daily percentage loss in six weeks.
The slide began after the market looked ready to climb near June's record high at $1,264.90 an ounce.
U.S. December gold futures slipped $6.60 to close at $1,250.90 an ounce. It tumbled to a low of $1,243.50, a level last seen on September 3.
Silver fell to $19.73 an ounce, against $19.88 on Wednesday, when it hit its highest level since early 2008 as investors sought a cheaper alternative to gold.
Gold tumbled to a one-week low after oil had firmed to a three-week high, U.S. equities were up, and the euro edged down against the dollar, all factors that tend to undermine demand for gold as a safe-haven asset.
By the close, oil had nudged lower, which helped gold cut its losses.
U.S. weekly filings for unemployment benefits fell to their lowest level in two months, and the U.S. international trade gap narrowed by more than forecast. The news boosted stocks .N, but nudged gold lower.
The July U.S. trade deficit shrank 14 percent, as imports retreated and exports shot to their highest since August 2008, lifting hopes for third-quarter economic growth.
"Gold was faltering on firmer equity markets and being viewed as less needed from a safe-haven perspective after the slightly stronger than expected U.S. data today," said David Meger, Vision Financial Markets director of metals trading in Chicago.
Once selling took gold below the $1,250 an ounce level stop-loss sell orders triggered selling to the day's low.
"We are still in a situation where confidence ebbs and flows pretty rapidly from day to day, and sometimes from hour to hour, and morning to afternoon as the data comes in and changes people's opinions," said Credit Suisse analyst Tom Kendall.
Gold has risen 15 percent in 2010 as economic uncertainty spurred investment in perceived safe-haven assets. Analysts said investors remain uneasy about the global economy, so gold looks unlikely to completely shed its safe-haven appeal any time soon.
Gold "got a bit of a lift from concern over sovereign debt and European banks earlier in the week, but that has faded and it's tough ... to find a near-term catalyst to keep propelling the market higher and probably one of the reasons that we haven't hit new highs," said James Steel, an analyst for HSBC in New York.
In fundamental news for gold, the South African statistics office said gold output fell 3.4 percent in volume terms, while total mineral production fell 1.0 percent in July.
Gold output has been dwindling in South Africa and is expected to drop to the world's fifth-largest producer this year from fourth in 2009, according to Reuters data.
Among platinum group metals, traders kept an eye on South African miner Northam Platinum, where union members are currently on strike and may continue for months.
Platinum was last quoted at $1,546.0 an ounce, down from $1,554.00 the day before. Palladium fell to $519.0 compared with $522.00 on Wednesday.
(Additional reporting by Pratima Desai; Editing by David Gregorio)