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PRECIOUS-Gold drops 1.4 pct on month-end profit taking, dollar rise

4:07 p.m. EDT (2007 GMT). During the session, gold hit a
Thursday, 31 Oct 2013 | 4:35 PM ET

* Silver down more than 3 pct, platinum group metals slump

* End of month, FY selling by commodity funds weighs

* Follow-through weakness from Fed policy statement seen

* Coming up: US ISM index Friday

NEW YORK/LONDON, Oct 31 (Reuters) - Gold and other precious metals fell on Thursday as commodity funds sold to square books at the end of October, and as investors kept selling after the Federal Reserve's latest policy outlook offered few surprises. Gold's daily decline was the second biggest among commodities. For the month, gold ended October just 0.2 percent lower, its decline limited by economic uncertainty over a partial U.S. government shutdown and Washington's delay in raising the U.S. debt ceiling. On Thursday, a sharp rise in the dollar index broadly pressured commodities after data showed business activity in the U.S. Midwest surged past expectations in October, countering recent evidence of soft economic growth. "We are seeing some liquidation on the dollar rise and higher Treasury yields. Uncertainty in the equities market is also prompting some gold investors to take profits at the end of the month," said Tom Power, senior commodity broker at RJO Futures. The S&P 500 equities index ended down 0.4 percent on Thursday. Spot gold was down 1.4 percent at $1,323.69 an ounce one-week low at $1,318.79. U.S. gold futures for December delivery settled down $25.60 at $1,323.70 an ounce, with trading volume largely in line with its 30-day average, preliminary Reuters data showed. Comex gold options floor trader Jonathan Jossen said many commodity funds close out core positions and make funds available for year-end taxes on Oct 31, the last day of the fiscal year for such funds. On Wednesday, gold fell after the Fed did not sound quite as alarmed about the economy after its last policy meeting as some had anticipated. The U.S. central bank kept its $85 billion-a-month stimulus plan intact. Silver underperformed gold and was the biggest decliner in the 19-commodity Thomson Reuters/CoreCommodity CRB index. It fell 3.3 percent at $21.90 an ounce, its biggest one-day loss in more than a month.

CHINA PREMIUMS ERASED Bullion was also undermined by slow physical buying in Asia, especially China. Premiums of physical gold bars on the Shanghai Gold Exchange have largely faded due to fears of a cash crunch, dealers said.

Data showed that China in September bought more than 100 tonnes of gold from Hong Kong for a fifth straight as demand for bullion bars and jewellery was strong. Spot platinum was down 1.5 percent at $1,447.24 an ounce, while spot palladium fell 1 percent to $735.22 an ounce.

4:07 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1323.70 -25.60 -1.9 1318.70 1343.00 143,860 US Silver DEC 21.867 -1.116 -4.9 21.730 22.690 51,148 US Plat JAN 1448.40 -31.50 -2.1 1446.70 1472.50 9,181 US Pall DEC 736.80 -12.70 -1.7 735.10 746.60 5,448 Gold 1323.69 -18.50 -1.4 1318.79 1342.79 Silver 21.900 -0.740 -3.3 21.840 22.690 Platinum 1447.24 -22.76 -1.5 1450.50 1470.50 Palladium 735.22 -7.78 -1.0 738.00 743.47 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 149,714 154,161 188,108 20.21 -0.61 US Silver 54,084 42,028 55,755 29.18 -0.14 US Platinum 9,364 13,309 12,874 16.96 0.00 US Palladium 5,679 4,073 5,653