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PRECIOUS-Gold falls about 1 percent on strong U.S. growth data

* Outlook for higher U.S. growth prompts profit taking

* Selling picks up on break of key technical levels

(Adds comment, second byline, dateline, updates market activities)

NEW YORK/LONDON, March 27 (Reuters) - Gold dropped nearly 1 percent on Thursday, breaking below $1,300 an ounce for the first time since mid-February, as encouraging U.S. economic growth in the fourth quarter diminished the metal's appeal as a hedge.

A stronger dollar and technical weakness after bullion broke through psychological support at $1,300 an ounce and its 200-day moving average at $1,296 an ounce also triggered selling, traders said.

The U.S. economy grew a bit faster than previously estimated in the fourth quarter and new claims for jobless aid dropped to a near four-month low last week, suggesting the economy has plenty of momentum to break out of its winter chill.

"Gold is under the pressure after the strong GDP report fuelled anticipation of higher economic activities in the second and third quarter," said Frank McGhee, head precious metals dealer at Chicago commodities brokerage Alliance Financial LLC.

Spot gold was down 0.8 percent at $1,292.80 an ounce by 12:45 p.m. EDT (1645 GMT), having earlier hit $1,291.36 - a six-week low

So far this week, the metal was down about 3 percent. It hit a six-month high at $1,391.76 earlier in March on geopolitical tensions.

Holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust fell 1.8 tonnes to 816.97 tonnes on Wednesday, after declining 2.70 tonnes in the previous session. That has cut its net inflow for the year to 18.8 tonnes.

Among other precious metals, silver was unchanged from Wednesday's close at $19.68 an ounce.

Platinum fell 0.7 percent to $1,391.24 an ounce, while palladium was down 2.3 percent at $757.97 an ounce as investors took profit after a recent rally on supply worries in South Africa.

(Editing by William Hardy and Cynthia Osterman)