LONDON, Aug 9: Gold fell more than one per cent on Thursday as concerns about a global credit crunch flared up and increased gold sales by central banks dampened market sentiment.

Spot gold fell to $667.00/667.60 an ounce by 1002 GMT from $674.20/675.00 late in New York late on Wednesday when it rose to its highest in nearly two weeks at $676.60 an ounce.

Physical demand is not strong anymore. There is a risk of downside movement in gold, he added.

Traders also said that heavy gold sales by some European investment banks pushed prices to intraday lows.

The French bank said it has suspended the funds as problems in US subprime mortgages and diminishing liquidity are preventing it from calculating their value.

The news renewed worries that troubles in US mortgages would spread globally by hitting banks, with the repricing of risks threatening to trigger a credit crunch and weigh on corporate and economic activity.

The deals avoided strikes and may calm market nerves a[bout possible stoppages in the world's number one platinum producing country.

Spot platinum was last quoted at $1,274/1,278, down from $1,284/1,288 in the US market, while silver was at $12.98/13.02 an ounce, versus $13.10/13.15. Palladium was down $1 at $360/362 an ounce.—Reuters