PRECIOUS-Gold falls on easing North Korea tensions, strong U.S. data

    * N. Korea signals delay to missile launch plans
    * U.S. retail data exceeds expectations
    * Empire State business index highest since Sept. 2014
    * Dollar, stocks, bond yields rise
    * Technical support at $1,261.30

 (Updates prices, adds U.S. data)
    By Peter Hobson
    LONDON, Aug 15 (Reuters) - Gold fell sharply for a second
day on Tuesday after better-than-expected U.S. economic data and
a decrease in tensions over North Korea encouraged investors to
buy riskier assets, boosting stocks, the U.S. dollar and bond
    Gold, seen as a safe haven in times of uncertainty, rose to
a two-month high of $1,291.86 on Friday after a week of
escalating military threats between Washington and Pyongyang. 
    But fears of conflict eased when North Korean leader Kim
Jong Un on Tuesday signalled he would delay a decision on firing
missiles towards Guam, a U.S. territory in the Pacific.
    "Global tensions seem now to be ratcheting down," Robin
Bhar, head of metals research at Societe Generale, said.
"Investors are looking to liquidate (positions in gold) and pick
up some more risky assets."
    Spot gold        was down 1.1 percent at $1,268.53 an ounce
at 1320 GMT, taking losses since Friday's high to 1.8 percent. 
    U.S. gold futures         for December delivery were 1.3
percent lower at $1,273.80 an ounce. 
    Gold's fall accelerated after strong U.S. retail sales in
July and a high business conditions index suggested strong
economic growth.                          
    "(This) has resulted in higher bond yields, a U.S. dollar
recovery and further downward pressure on gold prices," ABN AMRO
analyst Georgette Boele said. 
    A strong dollar is negative for gold prices because it makes
dollar-priced gold costlier for holders of other currencies,
while higher bond yields raise the opportunity cost of holding
non-yielding bullion. 
    Also weighing on gold was the prospect of another increase
in U.S. interest rates after an influential Federal Reserve
official said he expected one more rise this year.             
    Gold is highly sensitive to rising interest rates because
they push bond yields higher and tend to strengthen the dollar.
    Speculative investors who had in recent weeks built up large
bets on higher prices were being forced to reduce their
positions, pushing prices lower, Saxo Bank analyst Ole Hansen
    The retreat from Friday's high is the third time this year
that gold has failed to reach $1,300, a key technical level.
    Technical fibonacci supports for gold were at $1,274.70 and
$1,261.30, ScotiaMocatta analysts said in a note. 
    In other precious metals, silver        was down 2.6 percent
at $16.59 an ounce, falling below its 100- and 200-day moving
    Platinum        was down 1.7 percent at $948.75, while
palladium        was 1.1 percent lower at $885.30 an ounce.   

 (Additional reporting by Apeksha Nair and Nithin Prasad in
Bengaluru; Editing by David Holmes and Jane Merriman)