PHOTO
* Fed says U.S. economy "expanding moderately"
* Coming up: U.S. Q2 GDP at 1230 GMT
(Updates throughout, changes dateline from MANILA)
By Clara Denina
LONDON, July 30 (Reuters) - Gold fell more than 1 percent on Thursday, trading close to a 5-1/2-year low hit last week, as the dollar jumped after the Federal Reserve left the door open for a rate rise in September and ahead of U.S. GDP data.
After a two-day meeting, Fed policymakers said the economy had overcome a first-quarter slowdown and was "expanding moderately". A Reuters poll showed the U.S. economy may have rebounded in the second quarter.
That buoyed the dollar, up 0.3 percent against a basket of leading currencies, making dollar-priced gold more costly for non-U.S. buyers.
Spot gold dropped 1.3 percent to a session low of $1,081.85 an ounce in earlier trade, not far from its cheapest since February 2010 at $1,077 hit after a selloff on July 20. It was down 1 percent at $1,085.76 by 0932 GMT.
U.S. gold for August delivery
GCcv1
slipped 0.8 percent to $1,084.20 an ounce.
"The Fed yesterday gave a stronger hint of a sooner-rather-than-later rate hike and the dollar strengthened and that impacts all the commodities," Citigroup strategist David Wilson said.
"As the focus is back on the dollar and its strength, the trajectory for gold is down until a hike actually happens."
Markets were awaiting U.S. Q2 gross domestic product data due later in the day.
U.S. economic growth likely accelerated at an annual rate of 2.6 percent in April-June after shrinking in the first quarter, according to a Reuters poll of economists.
First-quarter gross domestic product, previously reported to have contracted by 0.2 percent, could also be revised higher.
A substantially higher growth number would strengthen views for a September interest rate increase, Mizuho Bank said in a note.
"We think that the Fed will adopt a gradual pace of tightening, we expect only one rate hike this year. And policy will continue to be conditioned on data," it said.
Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, were unchanged at 21.87 million ounces for a second day on Wednesday. That level is the lowest since September 2008.
Spot platinum was up 0.3 percent at $986 an ounce, within reach of a 6-1/2-year low of $942.49 hit in the previous week. Palladium rose 0.7 percent to $620 an ounce and silver dropped 0.7 percent to $14.64 an ounce.
(Additional reporting by Manolo Serapio Jr in Manila; Editing by Dale Hudson) ((clara.denina@thomsonreuters.com)(+44 207 542 9420)(Reuters Messaging: clara.denina.thomsonreuters.com@reuters.net))
* Coming up: U.S. Q2 GDP at 1230 GMT
(Updates throughout, changes dateline from MANILA)
By Clara Denina
LONDON, July 30 (Reuters) - Gold fell more than 1 percent on Thursday, trading close to a 5-1/2-year low hit last week, as the dollar jumped after the Federal Reserve left the door open for a rate rise in September and ahead of U.S. GDP data.
After a two-day meeting, Fed policymakers said the economy had overcome a first-quarter slowdown and was "expanding moderately". A Reuters poll showed the U.S. economy may have rebounded in the second quarter.
That buoyed the dollar, up 0.3 percent against a basket of leading currencies, making dollar-priced gold more costly for non-U.S. buyers.
Spot gold dropped 1.3 percent to a session low of $1,081.85 an ounce in earlier trade, not far from its cheapest since February 2010 at $1,077 hit after a selloff on July 20. It was down 1 percent at $1,085.76 by 0932 GMT.
U.S. gold for August delivery
"The Fed yesterday gave a stronger hint of a sooner-rather-than-later rate hike and the dollar strengthened and that impacts all the commodities," Citigroup strategist David Wilson said.
"As the focus is back on the dollar and its strength, the trajectory for gold is down until a hike actually happens."
Markets were awaiting U.S. Q2 gross domestic product data due later in the day.
U.S. economic growth likely accelerated at an annual rate of 2.6 percent in April-June after shrinking in the first quarter, according to a Reuters poll of economists.
First-quarter gross domestic product, previously reported to have contracted by 0.2 percent, could also be revised higher.
A substantially higher growth number would strengthen views for a September interest rate increase, Mizuho Bank said in a note.
"We think that the Fed will adopt a gradual pace of tightening, we expect only one rate hike this year. And policy will continue to be conditioned on data," it said.
Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, were unchanged at 21.87 million ounces for a second day on Wednesday. That level is the lowest since September 2008.
Spot platinum was up 0.3 percent at $986 an ounce, within reach of a 6-1/2-year low of $942.49 hit in the previous week. Palladium rose 0.7 percent to $620 an ounce and silver dropped 0.7 percent to $14.64 an ounce.
(Additional reporting by Manolo Serapio Jr in Manila; Editing by Dale Hudson) ((clara.denina@thomsonreuters.com)(+44 207 542 9420)(Reuters Messaging: clara.denina.thomsonreuters.com@reuters.net))
