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PRECIOUS-Gold falls as market takes breather after 3-day rally

* U.S. equities rises, weighing down on gold

* Support seen after weak U.S. homebuilder confidence data

* Global gold demand slips 15 pct in 2013 - WGC

(Adds comment, second byline, dateline, updates market activities) NEW YORK/LONDON, Feb 18 (Reuters) - Gold fell on Tuesday as the market took a breather after a three-day rally that pushed it over $1,330 an ounce, but prices hovered around a 3-1/2 month high due to lingering worries over global economic growth. Bullion came under pressure as U.S. equities gained despite disappointing economic reports. On Tuesday, data showed U.S. homebuilder confidence suffered its largest one-month drop ever in February, and the New York Federal Reserve's gauge of manufacturing showing weaker-than-expected reading. Gold gained 3 percent in three straight sessions after weak U.S. manufacturing output last week cast doubts over the pace of the Federal Reserve's monetary tightening, sparking better investment demand with rare gains in holdings in gold exchange-traded funds. "In our view, the two drivers that have propelled prices - short covering activity and Chinese demand - are likely to lose momentum in the forthcoming sessions," said Suki Cooper, precious metals analyst at Barclays Capital. "Gold needs investor sentiment to turn decisively positive to extend recent gains," Cooper said. Spot gold slipped 0.5 percent to $1,321.84 by 12:09 p.m. EST (1709 GMT). Earlier in the day, bullion touched its highest since Oct. 31 at $1,332.10 in the previous session. U.S. COMEX gold futures were up $3.80 to $1,322.40 an ounce, with trading volume on track to finish in line with its 30-day average, preliminary Reuters data showed. Investors have been seeking shelter in gold on fears of slowing growth in China and as a string of U.S. economic data showed the world's largest economy had been hit by cold weather. Sentiment favoring the metal in the short term seems to have gathered momentum, but analysts remain cautious overall about the longer run, expecting the dollar to strengthen and the U.S. economy to recover. More clues on the Fed's thinking is due on Wednesday, when it publishes the minutes of its last meeting. "I suppose the interest around the FOMC minutes would be what they have to say about the slowdown in the U.S. economy, which could be providing some gold direction in the short term," Macquarie analyst Matthew Turner said. Also weighing down on prices was a World Gold Council (WGC) report that showed global gold demand fell 15 percent in 2013 as huge outflows from physically backed investment funds outweighed record consumer demand. Indian gold consumption is expected to be 900-1,000 tonnes in 2014 on strong jewellery and investment purchases, while China's demand should be 1,000-1,100 tonnes, the WGC said.

Among other precious metals, silver rose 0.7 percent to $21.79 an ounce, having climbed to a three-month high at $21.96 on Monday. Platinum fell 0.3 percent to $1,420.25 an ounce, while palladium dropped 0.5 percent to $735 an ounce. Prices at 12:09 p.m. EST (1709 GMT)

LAST NET PCT YTD CHG CHG CHG US gold 1322.40 3.80 0.3% -21.1% US silver 21.830 0.004 1.9% -27.8% US platinum 1424.80 -5.30 -0.4% -7.4% US palladium 737.00 -0.60 -0.1% 4.8% Gold 1321.84 -6.65 -0.5% -21.1% Silver 21.79 0.15 0.7% -28.1% Platinum 1420.25 -4.25 -0.3% -7.6% Palladium 735.00 -3.50 -0.5% 4.7% Gold Fix 1320.75 6.75 0.5% -20.6% Silver Fix 21.37 -28.00 -1.3% -28.6% Platinum Fix 1424.00 2.00 0.1% -6.5% Palladium Fix 736.00 3.00 0.4% 5.3%

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Jane Baird and Marguerita Choy)