* U.S. GDP, jobless data better than expected
* Oil prices slip as investors question OPEC results
* Spot palladium at 7-week high
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Eric Onstad
NEW YORK/LONDON, Sept 29 Gold was up a shade on
Thursday after the dollar flip-flopped in the wake of mixed U.S.
data and as scepticism grew over whether OPEC members would be
able to implement production cuts that could fuel inflation.
The dollar index, which measures the greenback
against a basket of currencies, rose to a session high after
stronger than expected data on U.S. second-quarter economic
growth and weekly jobless claims.
The dollar, however, pared gains after further data showed
contracts to buy previously owned U.S. homes dropped in August
to their lowest level since January.
When positive data is released, investors raise bets on a
U.S. interest rate hike, which would increase the opportunity
cost of holding non-yielding bullion.
Spot gold was up 0.18 percent at $1,323.61 an ounce
by 2:02 p.m. EDT (1802 GMT), having touched an overnight high of
U.S. gold futures settled up 0.2 percent at $1,326.
Gold pared earlier gains in the aftermath of a decision by
the OPEC on Wednesday to make modest output cuts in the first
such deal since 2008.
The news gave oil an initial boost, only for the price to
slip as investors questioned whether the deal would be enough to
rebalance a heavily over supplied market..
"If OPEC ends up achieving its objective, it could
significantly change the outlook for global inflation and the
need to have a hedge (potentially through gold) against higher
inflation," said Danske Bank senior analyst Jens Pedersen.
Division between Federal Reserve policymakers on when to
raise U.S. interest rates has sapped investor enthusiasm for
trading on comments by officials from the central bank.
"The gold and dollar markets are currently without very
strong direction. The mixed views from U.S. Fed officials have
weakened their credibility and the market has stopped buying
(on) their comments," said Jiang Shu, chief analyst at Shandong
UBS Strategist Joni Teves said in a note that the
expectation that low inflation should keep yields down and Fed
policy easy, means gold prices will move higher.
"Our expectation of much lower long-end real yields supports
our positive gold outlook, and an environment of 'low for
longer' would be a conducive backdrop for gold's next leg
higher," Teves said, forecasting an average gold price of $1,400
Among other precious metals, spot palladium rose for the
third straight day, climbing as much as 1.7 percent to $721.30
an ounce, the highest since Aug. 11.
Silver fell 0.35 percent at $19.11 an ounce, while
platinum rose 0.3 pct at $1,028.40.
(Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Marguerita Choy and David Evans)