PRECIOUS-Gold falls 1.3 pct on hopes of U.S. deal to avert default

* Republicans offer plan for short-term U.S. debt ceiling increase * US gold futures volume lag, funds seen on sidelines - trader * 44,000 ounces of platinum lost as two-week strike ends -Amplats * Coming up: Reuters/U.Michigan consumer sentiment Friday By Frank Tang and Clara Denina NEW YORK/LONDON, Oct 10 (Reuters) - Gold fell more than 1 percent on Thursday on signs that a deal might be reached to avert a potential U.S. debt default, which boosted the dollar and discouraged safe-haven bids. On Thursday, Republicans in the House of Representatives offered a plan that would postpone a possible default and urged President Barack Obama to negotiate an end to the 10-day government shutdown. Bullion fell for a third consecutive day, as hopes of a U.S. deal to raise the country's debt-ceiling limit weighed on safe havens. The S&P 500 equities index rallied 2 percent and the dollar index rose. "Both Republicans and Democrats are starting to be a little bit more willing to find a solution and that's what is dragging gold lower," Danske Bank analyst Christin Tuxen said. Spot gold was down 1.3 percent at $1,290.02 an ounce by 3:33 p.m. EDT (1933 GMT). U.S. Comex gold futures for December settled down $10.30 an ounce at $1,296.90, with trading volume about 25 percent below its 30-day average, preliminary Reuters data showed. Gold futures trading volume has been light this week. Prices remained rangebound, with buyers on the sidelines due to a lack of U.S. data and anxiety over the deadlock in Washington. "When you don't have the big buyers coming in, it takes a lot to lift the market when you are relying on smaller players and physical buyers," said Thomas Capalbo, a precious metals broker at New York futures brokerage Newedge. Gold's losses were limited by data that showed U.S. weekly jobless claims touched a six-month high last week as a computer-related backlog of claims was processed and a partial U.S. government shutdown began to hit some non-federal workers. Silver dropped 0.8 percent to $21.70 an ounce. PLATINUM GROUP METALS UP The bullion market also digested news that taxes on gold, jewels and art could jump in France next year as part of measures to plug the country's budget deficit. The International Monetary Fund on Thursday said it had received approval from its member nations to transfer profits from gold sales to a fund to help low-income nations, freeing up about $1.9 billion a year in available aid. Prices of platinum group metals were supported by news that Anglo American Platinum lost 44,000 ounces of production during a nearly two-week strike that ended on Thursday, analysts said. Platinum gained 0.7 percent to $1,382 an ounce on persistent fears that mining strikes in South Africa could hurt supply, while palladium rose 0.9 percent to $707 an ounce. 3:33 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1296.90 -10.30 -0.8 1289.30 1312.00 122,758 US Silver DEC 21.896 0.005 0.0 21.710 22.250 29,852 US Plat JAN 1396.00 13.00 0.9 1380.60 1399.90 8,003 US Pall DEC 712.55 8.45 1.2 701.30 713.00 3,299 Gold 1290.02 -16.57 -1.3 1290.83 1311.11 Silver 21.700 -0.170 -0.8 21.720 22.180 Platinum 1382.00 9.20 0.7 1383.50 1395.00 Palladium 707.00 6.50 0.9 703.03 711.50 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 130,908 161,253 189,385 24.13 -0.58 US Silver 31,881 50,743 56,704 35.67 0.88 US Platinum 8,733 14,859 13,005 21.29 0.00 US Palladium 3,357 4,685 5,786

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