PRECIOUS-Gold turns positive after U.S. growth data
* U.S. Q3 GDP data better than expected
* Dealers track seasonal Indian demand before Diwali
* Monetary easing seen presaging higher gold prices
(Adds trade comment, background, updates prices)
LONDON, Oct 26 (Reuters) - Gold turned positive along with other commodities and nominally higher risk assets like stocks on Friday after better-than-expected U.S. third-quarter growth data, reversing earlier losses linked to weak corporate earnings.
A report showed U.S. economic growth picked up in the third quarter as a late burst in consumer spending offset the first cutbacks in investment in more than a year by cautious businesses.
``At the moment the gold market is very much driven by speculative interest. Commodities moved higher in tandem, including the industrial metals,'' said Eugen Weinberg, head of commodity research at Commerzbank.
Spot gold was up 0.2 percent at $1,714.19 an ounce at 1450 GMT, having earlier dropped as low as $1,700.34. U.S. gold futures for December delivery were up $3.00 an ounce at $1,716.00.
Wall Street stock index futures pared losses on Friday after the data, while other commodities like crude oil, copper and aluminium swung higher.
Spot gold 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.
Weinberg said monetary easing presaged higher gold prices.
``We still believe that gold prices are likely to increase by year-end to something like $1,900 because the environment is in favour of monetary policy easing,'' he said.
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.
Dealers noted vigorous gold 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.
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.
``If (Republican presidential candidate Mitt) Romney wins, the dollar could get a boost and the Fed's easing policy might not continue,'' London-based bullion brokers Sharps Pixley said in a market note.
Silver was up 0.47 percent at $32.22 an ounce, while spot platinum was down 0.2 percent at $1,557.74 an ounce and palladium fell 1 percent to $595.97 an ounce.
(Editing by James Jukwey and Helen Massy-Beresford)