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NY gold lunges lower early on US data, silver rises

NEW YORK, July 31 (Reuters) - COMEX gold futures fell Thursday morning as speculators lightened up longs after upbeat U.S. economic data lifted the dollar, but dealer buying braked the skid.

"We're futzing about here. The market is very long, and we saw liquidation after the data. But there is buying down below $357" in most-active December gold, a COMEX floor broker said.

Stronger-than-expected U.S. second-quarter growth and a fall in the number of Americans registering jobless claims supported views that the economy was rebounding, denting demand for safe-haven gold in favor of stocks and the dollar.

U.S. GDP grew at a surprisingly brisk 2.4 percent in the second quarter, up from an anemic annual rate of 1.4 percent in each of the two prior quarters, easily beating Wall Street economists' forecasts for a 1.5 percent rise.

Benchmark December gold on the New York Mercantile Exchange's COMEX division at 1024 EDT fetched $357.20 an ounce, down 90 cents, trading $359.40-$356.30. Front-month August lost $1.40 to $354.80.

The euro quickly fell to a session low of $1.1281, a loss of 0.70 percent, then recovered some ground before dropping again. A weak euro usually hurts demand for dollar-denominated gold in Europe.

Spot gold traded at $354.10/4.85, off from Wednesday's late quote in New York at $355.90/6.40. London dealers fixed the afternoon spot reference price at $354.75.

JP Morgan technical analysts said they saw a correction developing in bullion back toward $350,

"We warned that this market looked toppy around $366 and that a corrective pullback should be seen. That move is now underway with targets lying around $350," they said in a market note. "We will then be looking for signs of a base developing for a return to the developing bull trend."

Traders pinpointed chart support in COMEX December futures at $356.30, $355 and $350, with resistance at $368.

Silver prices ratcheted higher with other industrial metals on the bullish U.S. data while recent consolidation in its range above $5.00 was seen as a buying opportunity for a move higher.

COMEX September silver rose 7.0 cents to $5.13 an ounce, in a session range of $5.045 to $5.15.

Spot silver was at $5.12/5.14 versus New York's Wednesday close at $5.06/5.08. Silver fixed at $5.08.

NYMEX October platinum slipped $2 to $683.00 an ounce. Spot platinum was at $684.00/689.00.

September palladium gained $1.00 to $178 an ounce. Spot palladium hit $176.00/181.00.