* U.S. growth data disappoints, stocks knocked
* Gold still on track for worst monthly loss since December
* Palladium holds near highest since late June
(Updates prices, adds comment)
By Jan Harvey
LONDON, July 30 (Reuters) - Gold firmed on Friday, rising
back above $1,170 an ounce, after U.S. growth data disappointed
investors, but weaker overall investment demand for the precious
metal kept prices in check.
Gold is still down nearly 6 percent so far in July, on track
for its biggest monthly loss since December, having slipped as
concern over euro zone sovereign debt levels, which sent the
metal to a record $1,264.90 an ounce in June, receded.
Spot gold <XAU=> was bid at $1,171.85 an ounce at 1425 GMT,
against $1,168.05 late in New York on Thursday. U.S. gold
futures for December delivery <GCZ0> firmed $2.70 to $1,173.90.
Prices rose as high as $1,175.75 an ounce in early afternoon
trade in the immediate aftermath of disappointing U.S. growth
data for the second quarter, which knocked equity markets lower.
However, it has struggled to maintain those gains.
"Compared to the buying we saw in the early summer months on
the gold market, which was driven by sovereign debt, a downward
revision in the second estimate of U.S. GDP growth is relatively
small fish," said Bank of America-Merrill Lynch analyst Michael
Widmer.
"I think that is why we popped up but then came off again."
Data released by the U.S. Commerce Department showed that
economic growth slowed in the second quarter to 2.4 percent,
after a revised 3.7 percent growth rate in the first three
months of the year. []
European stocks, which fell more than 1 percent after the
data, later pared those losses. U.S. stocks opened lower, but
also lifted from lows after further data showed business
activity in the U.S. Midwest grew more than expected in July.
[] []
The dollar pared losses against the yen but cut gains versus
the euro after the business activity report. The dollar index,
which measures the unit's performance against six other
currencies, edged higher. []
"The strength of the global recovery is still debatable as
the yen, often viewed as a safe haven, strengthens against the
dollar and the euro," said Saxo Bank senior manager Ole Hansen.
COMMODITIES SOFTEN
Oil lifted from lows after tumbling nearly 2 percent after
the GDP data as investors focussed on a slowing economy. Copper
prices edged higher. [] []
From a technical perspective, gold is still looking
vulnerable to further losses after breaking through key support
at $1,175 an ounce earlier this week, analysts said.
"On a closing basis, support for gold still holds at $1,160,
as the metal's attempts past this point continue to bring buyers
into the market," said ScotiaMocatta in a note.
"This is encouraging as far as arresting the liquidation
goes, but without a break of downtrend resistance, currently
holding at $1,190, we see no reason to turn bullish on gold."
Among other precious metals, silver <XAG=> was bid at $17.82
an ounce against $17.59, while platinum <XPT=> was at $1,552.50
an ounce against $1,560.
Palladium <XPD=>, which rose more than 4 percent on Thursday
on options-related buying, hit its highest since June 22 at
$489.50 on Friday, and was later at $484.60 versus $485.28.
The metal, which is up 10 percent so far in July, is set for
its first monthly gain since April. The gold-palladium ratio --
the number of ounces of palladium needed to buy an ounce of gold
-- fell to 2.4 on Friday, its lowest since mid-May.
"We can understand why palladium and the commodity complex
have outperformed gold of late," said UBS analyst Edel Tully in
a note. "Quite simply, investors are seeking risk and for now
gold's safe haven properties have been made redundant."
(Editing by Sue Thomas)
