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PRECIOUS-Gold falls for second day on ETF outflows after Fed

* Strong U.S. consumer spending, factory data weigh

* Largest gold-backed ETF posts sharp outflow in holdings

* Silver hits cheapest versus gold in 3-1/2 years

* Coming up: U.S. April nonfarm payrolls Friday

(Updates market activity, adds comment, byline, dateline, previous LONDON)

NEW YORK/LONDON, May 1 (Reuters) - Gold fell on Thursday on fresh outflows from gold exchange-traded funds, extending losses from the previous day when the Federal Reserve reinforced its view in the U.S. economy's prospects and reduced its monthly bond purchases, as expected.

The metal was under pressure after data showed U.S. consumer spending recorded its largest gain in more than 4-1/2 years in March and factory activity accelerated last month, strengthening views the economy was regaining steam.

Gold had briefly risen above $1,300 an ounce on Monday on escalating tensions in Ukraine, and as bullion investors had hoped the U.S. central bank would slow tapering bond purchases.

On Wednesday, the Fed said the economy "will expand at a moderate pace and labor market conditions will continue to improve gradually," an assessment that tracked its statement last month.

"The failure to build any momentum after we came back to the $1,300 level triggered technical selling," said Bill O'Neill, partner at New Jersey commodities investment firm LOGIC Advisors.

"Gold has failed to attract any flight to safety, and the ETF liquidation is a very big negative," he said.

Spot gold was down 0.9 percent at $1,279.24 an ounce at 2:31 p.m. EDT (1831 GMT), having touched a one-week low of $1,277.09.

U.S. COMEX gold futures for June delivery settled down $12.50 an ounce at $1,283.40, with trading volume at 120,000 lots, largely in line with its 30-day average, preliminary Reuters data showed.

In a separate U.S. economic report, jobless claims unexpectedly rose in the latest week, though the underlying trend continued to point to improving labor market conditions.

Gold investment demand remained weak. Holdings in the SPDR Gold Trust, the world's largest gold-backed ETF, fell 4.19 tonnes to 787.95 tonnes on Wednesday, its biggest outflow since April 16.

SLUGGISH INTEREST

U.S. physical demand, however, showed signs of improving. American Eagle gold bullion coin sales in April recovered from a seven-month low in March as retail buying picked up, while early interest in newly launched platinum coins slackened after strong buying in the first month they were available.

Among other precious metals, silver was down 0.5 percent at $19.01 an ounce.

The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, hit its highest since August 2010 on Thursday near 68, putting silver at its cheapest versus gold in more than 3-1/2 years.

Platinum was down 0.1 percent at $1,420.13 an ounce, while palladium was the only gainer in the precious metals complex, rising 0.4 percent to $810.50 an ounce.

2:30 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold JUN 1283.40 -12.50 -1.0 1277.30 1293.00 107,605 US Silver MAY 18.989 -0.130 -0.7 18.750 19.170 831 US Plat JUL 1427.50 -0.40 0.0 1412.10 1429.30 7,045 US Pall JUN 814.15 1.65 0.2 806.40 819.30 4,164 Gold 1284.06 -7.23 -0.6 1278.03 1292.60 Silver 19.010 -0.100 -0.5 18.870 19.220 Platinum 1420.13 -1.87 -0.1 1411.50 1426.00 Palladium 810.50 3.00 0.4 808.00 817.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 116,279 125,521 180,767 15.27 -0.37 US Silver 36,897 63,888 56,001 22.42 1.70 US Platinum 7,152 8,992 12,530 16.25 -0.38 US Palladium 4,419 5,422 5,658 26.07 0.31

(Additional reporting by Clara Denina in London; Editing by Keiron Henderson, Jason Neely and James Dalgleish)