Gold fell on Friday, edging closer to seven-week lows touched earlier this week as equities came under pressure from disappointing earnings results, with the focus on U.S. third-quarter growth that came in above market expectations. The U.S. economy expanded at a slightly faster 2 percent annual rate from July through September, buoyed by an rise in consumer spending and a burst of government spending. Analysts said a stronger reading may boost appetite for assets seen as higher risk, including commodities, and may fuel expectations for higher inflation, potentially lifting gold, which is often seen as a hedge against rising prices. "We've seen recently a run of good U.S. data," Standard Chartered analyst Daniel Smith said. "The risks are to the upside in the gold price. If you have an increase in risk appetite, you would have most metals moving up together, gold included." Spot gold [XAU= 1713.59 2.40 (+0.14%) ] was virtually flat around $1,709 an ounce, reversing earlier losses but not far off Wednesday's seven-week low of $1,698.39. U.S. gold futures [GCCV1 1711.10 -1.90 (-0.11%) ] for December delivery were also modestly lower near $1,704. World shares and commodities fell as lackluster corporate earnings reports undermined investor confidence before the release of American growth data due out later on Friday. Bullion rallied steadily to an 11-month peak above $1,795 an ounce in early October, with the U.S. Federal Reserve's latest program of purchasing mortgage-backed debt fuelling investment in the metal. But momentum has stalled since then. "We've got a general 'risk reduction' hitting the markets. It's hitting equities on the back of earnings concerns since big U.S. companies were not meeting earnings expectations," Fastmarkets' head of research Will Adams said. Adams said investors could buy gold as a safe haven due to uncertainty over the outcome of the U.S. election and the "fiscal cliff", automatic spending cuts and tax rises which threaten to send the country back into recession if Congress fails to reach a deficit reduction deal by the end of the year. Also speculation is growing that the Bank of Japan will unveil further monetary stimulus at its policy meeting on Oct. 30 to help the export-focused economy through a global slowdown. Ultra-low interest rates increase the appeal of gold, as it carries no yield and investors rely on a rise in the underlying price for a return on their investment. Festival Season Lower prices were expected to appeal to new buyers, with dealers anticipating a pickup in demand from India before the festive season peaks next month with Diwali. Weddings also take place during this period, with gold jewelry an essential part of bridal dowries from Indian parents. The second half of November is an auspicious period for weddings in India. From a technical perspective, analysts who study past price patterns for clues on the next direction of trade flag up support at $1,698 an ounce, the seven-week low hit on Wednesday. Below that, they identify potential support around $1,665 an ounce, near where the metal's 100 and 200-day moving averages currently converge. AngloGold Ashanti said on Friday workers at its West Wits operations in South Africa had returned to work after a wildcat strike. Commerzbank said in a daily market report that news that gold miners were returning to work in South Africa after stoppages would ensure a resumption of output. "Threats by some gold mining companies to sack workers striking illegally meanwhile seem to be taking effect, as most of the workforce has returned to work in many of the mines affected," it said. "It will still be some days, though, before production can be resumed." Further ahead, some dealers are looking into the possible impact for the gold price if Republican challenger Mitt Romney wins the Nov. 6 U.S. election. "If Romney wins, the dollar could get a boost and the Fed's easing policy might not continue," London-based bullion brokers Sharps Pixley said in a market note. Silver [XAG= 32.13 0.06 (+0.19%) ] was down slightly around $32 an ounce, while spot palladium[XPD= 601.47 -0.23 (-0.04%) ]was down about 0.3 percent near $600 ounce and platinum[XPT= 1561.49 1.19 (+0.08%) ] dipped marginally.

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