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Gold fell on Thursday after a five-day rally that pushed it to its highest since mid-May, as concerns abated that U.S.-led forces would soon launch a military strike on Syria, while investors awaited U.S. data for clues on the Federal Reserve's next move.
The United States and its allies have been discussing possible military action against Syria in response to last week's deadly chemical attack, stoking safe-haven buying in gold.
Spot gold dropped 0.7 percent to $1,408.21 an ounce by 0919 GMT. It had gained nearly $70 an ounce in the five sessions to Wednesday to a 3-1/2 month high of $1,433.31.
The dollar rose 0.5 percent, while European shares recovered from a three-day selloff.
Brent crude prices fell below $116 a barrel after climbing to a six -month high on Wednesday.
Gold, usually regarded as an inflation hedge, has benefited from soaring crude oil over the past few sessions, as this is one of the main components of the CPI headline inflation. Markets will be focusing on U.S. initial jobless claims figures and the revision to growth figures from the second quarter. Gold prices have risen nearly 8 percent this month, their biggest monthly climb since January 2012, after mixed U.S. economic numbers raised doubts that the Federal Reserve could be set to imminently curb its bullion-friendly $85 billion monthly bond-buying programme.
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