NEW YORK, Aug 28 (Reuters) - New York gold futures receded from 3-month highs early Thursday, cooled by profit-taking, a weaker euro, growing confidence in the economy and nervousness over the epic bullish bet hanging over the COMEX.
Both knee-jerk gold selling and more fund buying were reported after the release of a larger-than-expected upward revision to second quarter U.S. gross domestic product to 3.1 percent from last month's advance estimate of 2.4 percent.
December gold at 0916 EDT was down $2.60 at $371.40 an ounce. It traded from $374.20 to $370.30 after topping at $375.40, the highest since May 27, the previous session.
"Today is correction day. Everyone is sitting around not trading much," said a floor broker. "It's very different from yesterday's action. Weakness in the euro has helped push our market down a bit."
The upcoming U.S. Labor Day long weekend is also tempering the market's ardor.
The traders expect to see record open interest when the report on Wednesday's buying free-for-all is released late morning. New participants chased gold up $7.30 on Wednesday, and the market expects to see another jump in open interest after Tuesday's 6,881 gain put it to 243,009 contracts.
"It could be north of 10,000 or 11,000 (contracts)," said James Pogoda, a vice president of precious metals at Mitsubishi International Corp. "It's tough to stand in the way of the train. But at some point this thing is going to collapse and it's going to be like a house of cards."
Funds have already accumulated an unprecedented long position, which last Tuesday stood at 89,998 contracts. That is even more over-extended than when gold struck 6-1/2 year highs in February around $390 an ounce.
Gold stocks have been hitting new highs and bullion has been gaining momentum even though the dollar is up considerably from its May lows against the euro.
U.S. Middle East peace plans and the reconstruction of Iraq have seemed to come unglued in places, and recent weeks of mounting violence have supported gold as a safe-haven.
Spot bullion was indicated at $369.30/0.05, off from $372.60/3.10 late Wednesday. London bullion dealers fixed the morning spot reference price at $370.90.
Adding to Wednesday's frenzy was market speculation that the 1999 Washington Accord limiting government gold sales will be renegotiated at next month's International Monetary Fund meeting in Dubai, possibly with more countries and a higher cap on total sales.
The 5-year pact limited total disposals from participating European central banks to 400 tonnes per year.
December silver is becoming the active contract one day before September first notice day. December was down 4.6 cents at $5.11 an ounce after rallying to its highest since July 31 on Tuesday. The range so far was $5.16-$5.09.
Spot silver was at $5.08/10, off from $5.12/14 late Wednesday. The fix was $5.09.
NYMEX October platinum was down $5.70 at $708 an ounce, giving back some of Wednesday's $19 gain. Spot fetched $705.00/710.00, hovering near a 23-year high.
"Platinum at least you have a fundamentally strong market. I'm not too thrilled with the gold fundamentals," Pogoda said.
December palladium was down $2.30 at $205.50 an ounce. Spot palladium fetched $197.00/202.00.