* Fed says U.S. economy "expanding moderately", upbeat GDP
outlook
* Bearish pressure on gold strong - Phillip Futures
* Coming up: U.S. Q2 GDP; 1230 GMT
(Recasts, updates prices)
By Manolo Serapio Jr
MANILA, July 30 (Reuters) - Gold fell more than 1 percent to
near its weakest level since early 2010 on Thursday, as the
dollar jumped ahead of U.S. economic data that is likely to
strengthen expectations for an interest rate hike by the Federal
Reserve in September.
After a two-day meeting, U.S. policymakers said they felt
the economy had overcome a first-quarter slowdown and was
"expanding moderately". A Reuters poll showed the U.S. economy
may have rebounded in the second quarter. ID:nTLATIEB24
That buoyed the greenback .DXY , making dollar-priced gold
more costly for buyers using other currencies.
Spot gold XAU= dropped 1 percent to $1,084.46 an ounce by
0659 GMT, after hitting a low of $1,081.85.
Bullion sank to $1,077 last week, its cheapest since
February 2010, after a selloff in New York and Shanghai and has
since struggled to recover above $1,100.
"We still do think the bearish pressure on gold prices is
strong. We don't expect to see any substantial recovery," said
Howie Lee, analyst at Phillip Futures in Singapore.
Whether a U.S. rate hike - which would be the first since
2006 - came in September or December was immaterial, said Lee
who sees the next major support at $1,000.
"The slide that we've seen last week showed investors were
already pricing in the effect of the first rate hike whether
it's September or December. What matters is after the first rate
hike, how would they conduct the rest of the rate increases."
U.S. gold for August delivery GCcv1 slipped 0.8 percent to
$1,084 an ounce.
U.S. economic growth likely accelerated at an annual rate of
2.6 percent in April-June after shrinking in the first quarter,
according to a Reuters poll of economists.
First-quarter gross domestic product, previously reported to
have contracted by 0.2 percent, could also be revised higher
after the government took steps to refine the seasonal
adjustment for some components of GDP. ID:nL1N1093KZ
A substantially higher growth number would strengthen views
for a September rate hike, Mizuho Bank said in a note.
"We think that the Fed will adopt a gradual pace of
tightening, we expect only one rate hike this year. And policy
will continue to be conditioned on data," the bank said.
A looming increase in U.S. interest rates had weighed on
non-interest bearing gold, with some analysts predicting further
falls before and after the actual rate hike.
Holdings of the largest gold-backed exchange-traded-fund,
New York's SPDR Gold Trust GLD , were unchanged at 21.87
million ounces for a second day on Tuesday. That level is the
lowest since September 2008. GOL/ETF
In other metals, spot platinum XPT= and palladium XPD=
were steady and silver XAG= dropped 0.7 percent.