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PRECIOUS-Gold treads water; false China financing deals, demand weigh

SINGAPORE, June 27 (Reuters) - Gold was little changed early in Asian trading on Friday but looked likely to fall as concerns grew over weak physical demand and discovery of $15 billion of loans tied to falsified gold deals in top consumer China.

FUNDAMENTALS

* Spot gold was flat at $1,316.54 an ounce by 0029 GMT, after losing 0.1 percent in the previous session.

* Chinese gold processing firms have since 2012 used falsified gold transactions to borrow 94.4 billion yuan ($15.2 billion) from banks, the country's chief auditor said.

* Most commodity-financing deals are legitimate, but revelations of borrowing based on fake transactions in the gold market by the national auditor, which comes on the heels of alleged metals financing fraud at Qingdao Port, may prompt authorities to launch another crackdown on commodity financing.

* Data also showed that China's gold imports from Hong Kong dropped in May to the lowest level since January last year as a weaker yuan curbed appetite.

* A federal court has revoked the environmental license for a large gold mine planned by Belo Sun Mining Corp on the Xingu River in the Amazon, ruling that the company had failed to assess the impact on local indigenous communities.

* Comments from a U.S. Federal Reserve official that raising interest rates by the end of the first quarter in 2015 will be appropriate also pressured investor sentiment.

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MARKET NEWS

* U.S. stocks ended slight lower on Thursday after a Federal Reserve official said interest rates should rise by early 2015, while the pound gained on talk that UK rates also will go up, even as the Bank of England took only mild steps to tighten lending.

DATA/EVENTS (GMT) 0600 Germany Import prices May 0645 France Consumer spending May 0645 France Detailed Q1 GDP 0900 Euro zone Economic sentiment June 1200 Germany Consumer prices June

PRICES AT 0029 GMT

Metal Last Change Pct chg Spot gold 1316.54 -1.06 -0.08 Spot silver 21.1 0.05 0.24 Spot platinum 1466.6 3.8 0.26 Spot palladium 833.5 1.1 0.13 Comex gold 1317.6 0.6 0.05 Comex silver 21.105 -0.003 -0.01 Euro 1.3611 DXY 80.196

COMEX gold and silver contracts show the most active months

(Reporting by A. Ananthalakshmi; Editing by Michael Perry)