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PRECIOUS-Gold falls with equities before U.S. GDP data

* Financial markets await U.S. GDP data at 1230 GMT

* Dealers track seasonal Indian demand before Diwali

* Gold miners return to work in South Africa

(Changes market comment, byline, updates prices)

LONDON, Oct 26 (Reuters) - Gold fell on Friday, edging closer to seven-week lows touched earlier this week as equities came under pressure from disappointing earnings results, with the focus on U.S. third-quarter growth data due later in the day.

U.S. gross domestic product (GDP) is expected to have edged up to 1.9 percent in the last quarter, a Reuters poll showed, from 1.3 percent in the previous quarter.

Analysts said a stronger reading could boost appetite for assets seen as higher risk, including commodities, and may fuel expectations for higher inflation, potentially lifting gold, which is often seen as a hedge against rising prices.

``We've seen recently a run of good U.S. data,'' Standard Chartered analyst Daniel Smith said. ``The risks are to the upside in the gold price. If you have an increase in risk appetite, you would have most metals moving up together, gold included.''

Spot gold was down 0.43 percent at $1,703.86 an ounce at 1019 GMT, not far off Wednesday's seven-week low of $1,698.39. U.S. gold futures for December delivery were down $8.10 an ounce at $1,704.90.

European share markets followed Asian stocks lower as lacklustre corporate earnings reports undermined investor confidence ahead of American growth data due later on Friday.

The dollar was little changed versus a currency basket and the euro, with options market activity suggesting the single currency was likely to hold in a range versus the dollar.

Bullion rallied steadily to an 11-month peak above $1,795 an ounce in early October, with the U.S. Federal Reserve's latest programme of purchasing mortgage-backed debt fuelling investment in the metal. But momentum has stalled since then.

``We've got a general 'risk reduction' hitting the markets. It's hitting equities on the back of earnings concerns since big U.S. companies were not meeting earnings expectations,'' Fastmarkets' head of research Will Adams said.

Adams said investors could buy gold as a safe haven due to uncertainty over the outcome of the U.S. election and the ``fiscal cliff'', automatic spending cuts and tax rises which threaten to send the country back into recession if Congress fails to reach a deficit reduction deal by the end of the year.

Also speculation is growing that the Bank of Japan will unveil further monetary stimulus at its policy meeting on Oct. 30 to help the export-focused economy through a global slowdown.

Ultra-low interest rates increase the appeal of gold, as it carries no yield and investors rely on a rise in the underlying price for a return on their investment.

FESTIVAL SEASON

Lower prices were expected to appeal to new buyers, with dealers anticipating a pickup in demand from India before the festive season peaks next month with Diwali.

Weddings also take place during this period, with gold jewellery an essential part of bridal dowries from Indian parents. The second half of November is an auspicious period for weddings in India.

From a technical perspective, analysts who study past price patterns for clues on the next direction of trade flag up support at $1,698 an ounce, the seven-week low hit on Wednesday.

Below that, they identify potential support around $1,665 an ounce, near where the metal's 100 and 200-day moving averages currently converge.

AngloGold Ashanti said on Friday workers at its West Wits operations in South Africa have returned to work after a wildcat strike.

Commerzbank said in a daily market report that news that gold miners were returning to work in South Africa after stoppages would ensure a resumption of output.

``Threats by some gold mining companies to sack workers striking illegally meanwhile seem to be taking effect, as most of the workforce has returned to work in many of the mines affected,'' it said. ``It will still be some days, though, before production can be resumed.''

Silver was down 1.09 percent at $31.72 an ounce, while spot platinum was down 0.71 percent at $1,549.24 an ounce and palladium fell 1.40 percent to $593.3 an ounce.

(Editing by James Jukwey)