LONDON, Sept 15 (Reuters) - Gold fell by as much as 2.0 percent on Thursday, before paring some of the day's losses, after data that showed a surprisingly large drop in U.S. regional manufacturing and an unexpected rise in the number of people filing for unemployment benefit, which again highlighted the frailty of the U.S. economy.
Spot gold was last quoted at $1,787.20 an ounce at 1243 GMT, down 1.8 percent on the day, having fallen to a session low of $1,782.20 just after the data, its lowest since Aug. 29. A raft of technical selling hit the market with the break below $1,800.
Separate reports showed U.S. consumer inflation cooled in August as the price of gasoline receded, while manufacturing in New York state contracted for a fourth month in a row, but by far more than expected.
Also adding to worries about the ability of the world's largest economy to avert a deeper slowdown and create jobs, was an unexpected rise in weekly initial jobless claims. (Reporting by Amanda Cooper; Editing by Anthony Barker)