PRECIOUS-Gold drops below $1,400, set for second straight monthly gain
* Market steadies as Obama says planning response to Syria Dollar hits 4-wk high, Syria talk prompts safe-haven buying
* U.S. markets closed Monday for Labor Day holiday
(Adds closing prices, Obama speech, updates throughout.) NEW YORK, Aug 30 (Reuters) - Gold slid below $1,400 an ounce on Friday as the dollar rallied to a four-week high, with investors squaring positions at the end of the month and cashing in on a recent run-up ahead of a long U.S. holiday weekend. Analysts said gold's losses came mostly from month-end position squaring and profit-taking after prices on Wednesday reached their highest levels since mid-May. Investors remained poised for word on any U.S. military action in Syria. Gold was on track for a 5.40 percent gain on the month and its second straight monthly increase. It briefly trimmed its decline in the afternoon as U.S. Secretary of State John Kerry made a case for a "limited" strike against Syria, but prices fell back to pre-speech levels before he finished his televised address. President Barack Obama followed with his own remarks, telling reporters while he met with visiting leaders at the White House that the United States was still in the planning process for a response to Syria's chemical weapons use in Syria, adding that he was looking at limited action. "Gold was following crude, which was following Kerry. He started strong and didn't finish strong. He didn't say anything new," said Paul Sacks, principal gold trader at Aurum Options Strategies in New York. Spot gold eased 0.93 percent to $1,394.51 an ounce by 3:19 EDT (1919 GMT) after slipping to a session low of $1,392.06 an ounce. U.S. December gold futures lost $18.10 an ounce to $1,394.8 an ounce, down 1.28 percent. The precious metal slid below $1,400 an ounce early as the dollar rallied following soft euro zone economic readings. "Gold is under pressure from a firm U.S. dollar and lower oil prices after the West debates whether to attack Syria," Commerzbank analyst Eugen Weinberg said. While tensions over Syria kept investors on edge, James Steel, chief precious metals analyst at HSBC in New York, said month-end book squaring and the upcoming long U.S. weekend was likely adding volatility to the market. "Geopolitical rallies tend not to buoy the market unless there's further deterioration. In this case, it would be military action," Steel said. As of Wednesday, the latest rally had lifted gold to a 3-1/2 month high of $1,433.31. "The move higher in August was driven mostly by short-covering and opportunistic buying, which seems to have now run out of steam," VTB Capital analyst Andrey Kryuchenkov said. The U.S. dollar reached a four-week peak against a basket of major currencies as investors sought a safe-haven in case of a U.S. military strike on Syria. Earlier, data showing the pace of U.S. Midwest business activity rose to 53.0 from 52.3 in July helped lift the dollar but pressured gold. The index for prices paid within the series rose to its highest since November, raising an inflation flag that fed expectations the Federal Reserve could soon taper its monetary stimulus. In Hong Kong gold kilo bar premiums declined to $2.50 an ounce from $5 two weeks ago. Tokyo premiums fell to 50 cents from $1.50. Those in Singapore dropped to $1.50. Silver was down 1.72 percent at $23.42 an ounce, for a monthly loss of 1.3 percent. Spot platinum rose to $1,517.24 an ounce and jumped 6.1 percent in August. Spot palladium fell 2.04 percent to $719 an ounce, down 0.9 percent for the month.
4:07 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1396.10 -16.80 -1.2 1391.80 1411.50 123,980 US Silver SEP 23.463 -0.627 -2.6 23.385 24.015 2,299 US Plat OCT 1527.10 4.70 0.3 1510.20 1529.00 8,572 US Pall SEP 722.10 -15.65 -2.1 719.65 736.40 238 Gold 1394.56 -13.08 -0.9 1392.83 1410.91 Silver 23.440 -0.390 -1.6 23.410 23.980 Platinum 1516.74 3.04 0.2 1512.75 1525.00 Palladium 719.22 -14.76 -2.0 722.75 736.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 132,961 187,132 25.48 1.39 US Silver 44,807 55,303 30.67 -0.67 US Platinum 9,168 12,489 23.37 0.00 US Palladium 4,527 5,353
(Additional reporting by Josphine Mason in New York, Clara Denina in London, A. Ananthalakshmi in Singapore; Editing by William Hardy, Jane Baird, David Gregorio and Jim Marshall)