* Gold briefly below $1,200/oz on technical sell-off
* Bullion's biggest one-day loss since February
* Platinum market digesting flat US June auto sales
* Coming up: U.S. June nonfarm payrolls on Friday
(Recasts, updates prices, market activity to settlement)
By Frank Tang
NEW YORK, July 1 (Reuters) - Gold bullion plunged nearly 4
percent to below $1,200 an ounce on Thursday as a major
technical break and an early equities sell-off triggered heavy
fund selling, fueling the biggest one-day decline in five
months.
Disappointing U.S. and Chinese economic indicators drove a
major slide in oil, copper and some stock markets. The dollar
fell to a seven-month low against the yen, and bullion got
caught in the downdraft as investors cashed in profits in the
best-performing major asset of the second quarter.
Silver and platinum group metals also tumbled as signs of a
slowing economic recovery and lackluster U.S. auto sales hurt
the investment appeal of industrial metals.
"What you are seeing is clearly a nervous feeling about all
assets, whether they be tangible or intangible, paper or not.
The overall mood is bearish and metals may not be the safe
haven that you can just bank on," said Scott Meyers, senior
analyst at New York-based Pioneer Futures.
Spot gold <XAU=> hit a near one-month low of $1,197.25 an
ounce. It was last at $1,197.85 an ounce at 3:12 p.m. EDT (1912
GMT), against $1,241.35 late in New York on Wednesday. It
gained 11.7 percent in the March-June quarter.
U.S. gold futures for August delivery <GCQ0> settled down
$39.20, or 3.2 percent, at $1,206.70 an ounce.
Gold held firm in the last two days in the face of heavy
losses in the stock markets. However, gold's eventual decline
versus the S&P 500 index on Thursday was similar to a pattern
in May, when the market succumbed to liquidation by funds who
needed to cover margin calls in weaker markets.
"Gold has been caught up in commodity liquidation after
poor data and as equities (fall)," said Simon Weeks, head of
precious metals at the Bank of Nova Scotia.
"Usual story -- selling first as people need cash... and
then further down the road, the gold as a currency demand will
kick in."
In another repeat of mid-May market action, gold traded in
close tandem with the U.S. dollar on Thursday, maintaining a
link that was strongest at the height of the European debt
crisis in May, when the two were generally rising.
The decline accelerated after prices broke cleanly below
the five-month rising channel in place since February, and
could be set for further losses after dropping below the 50-day
moving average at $1,212.64 and the psychological $1,200 mark.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic showing gold's correlation with S&P 500:
http://link.reuters.com/kuz35m
Graphic showing the metal's technical outlook:
http://link.reuters.com/wyv35m
Graphic with commodities' performance in the first half:
http://link.reuters.com/hun72k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
A sharp retreat of the relative strength index (RSI) also
signaled bullion investors are taking profits in an overbought
market, analysts said. Open interest in COMEX futures had risen
to a record high on Wednesday. []
"You have too many people who are bullish on gold, and too
many cooks spoil a broth. So, some of the weaker hands are
getting washed out here," said Adam Hewison, president of
Maryland-based MarketClub.com.
U.S. equity markets logged a fourth straight day of
declines after data showed slower-than-expected manufacturing
growth in June and a sharp drop in May pending home sales. Eyes
now turn to Friday's non-farm payroll data. []
Among other precious metals, silver <XAG=> was at $17.80
against $18.55 on Wednesday.
Platinum group metals markets are digesting news of flat
U.S. auto sales in June, as major automakers said they saw no
sign of the definitive second-half recovery the battered
industry had expected early in the year. []
Platinum <XPT=> was at $1,498.50 an ounce against
$1,531.50. Palladium <XPD=> was at $428.50 against $442.
Prices at 4:16 p.m. EDT (2016 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1206.70 -39.20 -3.1% 10.1%
US silver <SIN0> 17.790 -0.918 0.0% 5.6%
US platinum <PLN0> 1506.80 -30.50 -2.0% 2.4%
US palladium <PAU0> 429.05 -15.35 -3.5% 4.9%
Gold <XAU=> 1197.15 -44.20 -3.6% 9.2%
Silver <XAG=> 17.80 -0.75 -4.0% 5.7%
Platinum <XPT=> 1501.00 -30.50 -2.0% 2.4%
Palladium <XPD=> 430.50 -11.50 -2.6% 6.2%
Gold Fix <XAUFIX=> 1234.00 -6.00 -0.5% 11.8%
Silver Fix <XAGFIX=> 18.65 -9.00 -0.5% 9.8%
Platinum Fix <XPTFIX=> 1514.00 4.00 0.3% 3.3%
Palladium Fix <XPDFIX=> 433.50 7.50 1.7% 7.8%
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
