Gold fell to a three-week low on Thursday, reversing early gains to end down nearly 1 percent on signs of strong US economic growth and on the European Central Bank's interest rate cut to a record low. The precious metal posted gains after the ECB cut interest rates and said it could take them lower still to prevent the euro zone's recovery from stalling as inflation tumbles.
Bullion later came under pressure when US GDP data showed economic growth accelerated in the third quarter as businesses restocked shelves. But the slowest expansion in consumer spending in two years suggested an underlying loss of momentum. A flurry of frantic sell orders shortly after the GDP data briefly hammered gold prices, sending them below $1,300 an ounce and setting the tone for the rest of the day.
From 8:40 to 8:50 am EST (1340-1350 GMT) nearly 30,000 lots were traded, about a fifth of total turnover at the time, Reuters data showed. Spot gold was down 0.9 percent at $1,305.85 an ounce by 4:08 pm EST (2108 GMT), having earlier hit $1,298.31, its lowest price since October 17.
US gold futures for December delivery settled down $9.30 at $1,308.50, with trading volume about 15 percent above its 250-day average, preliminary Reuters data showed, reversing a recent trend of weak turnover. Among other precious metals, silver was down 0.9 percent at $21.58 an ounce. Platinum fell 0.9 percent to $1,449.30 an ounce, and palladium dropped 0.5 percent to $758.25 an ounce.
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