Singapore: Gold held steady below USD 1,300 an ounce on Thursday, headed for its second monthly drop in three, as optimism over U.S. economic growth curbed safe-haven appetite for the metal.
The Federal Reserve on Wednesday upgraded its assessment of the U.S. economy, although it also reaffirmed that it was in no rush to raise interest rates.
Data on Wednesday also showed that the U.S. economy has rebounded sharply, with the gross domestic product expanding at a 4 percent annual rate in the second quarter, after shrinking at a revised 2.1 percent pace in the first.
Spot gold was flat at USD 1,294.45 an ounce by 0303 GMT, after dropping 0.3 percent in the previous session. It is headed for a 2.5 percent drop for the month.
"If data out of the United States continues to beat expectations, gold will come under further long liquidation," Swiss precious metals trader MKS Group said in a note.
"Technically, gold looks likely to continue to be range bound with the downside looking the most vulnerable."
Gold is poised to break support at USD 1,292 and fall further to USD 1,284, as indicated by its wave pattern and a Fibonacci projection analysis, according to Reuters technical analyst Wang Tao.
Investors turned their attention to U.S. nonfarm payrolls data due on Friday, while also keeping an eye on weekly jobless claims expected later on Thursday.
U.S. data is being watched closely by financial markets to gauge the strength of the world`s largest economy and discern further clues to how the Fed may act.
Geopolitical developments were also eyed, although conflicts in the Middle East and between Russian and Ukraine were having limited impact on markets on Thursday.
Israeli shelling killed at least 15 Palestinians sheltering in a U.N.-run school and another 17 near a street market on Wednesday, with no ceasefire in sight after more than three weeks of fighting.
Russia fought back over new U.S. and EU sanctions imposed over Ukraine even as G7 leaders warned of further steps, while Ukraine`s government accused pro-Russia rebels of placing land mines near the site of a crashed Malaysian airliner to prevent a proper investigation.
Geopolitical tensions often boost gold, which is seen as an alternative investment to riskier assets such as equities.
