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Gold traded in London dropped reversing previous increase amid signs that demand for the metal in the world's second largest consumer, China, is slowing, at the same time, palladium extended the longest drop in a month. Bullion for October settlement slipped 0.6% to $1,308.97 an ounce as of 10:41 London time, while palladium fell 0.2% to $716.92 an ounce.