* Dollar firms 0.55 pct versus retreating euro <EUR=>
* SPDR gold ETF holdings fall as investor appetite wanes
* Net long position in New York gold futures, options fall
(Updates with New York prices, comment. Changes byline,
deadline.)
By Carole Vaporean and Amanda Cooper
NEW YORK/LONDON, July 12 (Reuters) - Gold eased on Monday,
falling for the fourth time in seven sessions, as improved
investor confidence boosted the dollar against the euro and
diverted investment flows into the precious metals complex.
Spot gold <XAU=> fell to $1,198.45 an ounce by 2:35 a.m.
(1835 GMT) from the previous session's late quote at $1,211.85
an ounce. U.S. August gold futures <GCQ0> dropped $11.10 to
close at $1,198.70 an ounce on the COMEX.
Gold fell in a light, short-term profit-taking sell off
after Friday's run to the top of its recent trading range that
has been forming since the start of July.
Gold prices hit record highs in late June as concern over
European sovereign debt levels and instability in the broader
financial markets fueled a surge in safe-haven investment.
But as concerns subsided, as has investors' appetite for
gold, at least for now.
Lately, prices have remained within a sideways
consolidation range and should remain so as long as support and
resistance levels remain intact.
"As long as gold stays between support and resistance, in
this case the 50-day moving average and the upward trendline,
expect the sideways action to continue," said Adam Sarhan, CEO
of New York-based Sarhan Capital Llc.
Noting Monday's high came just short of the 50-day moving
average around $1,216 an ounce, Sarhan said that parameter is
acting as resistance for now.
On the downside, analysts defined support by the 6-week low
hit on July 7 at $1,185 an ounce, which also marks a one-year
upward trendline.
"If the bulls take out resistance, expect to reach the
all-time highs," said Sarhan. On the other hand, he added, a
violation of the support level could lead to declines to a
200-day moving average near $1,134 an ounce.
Gold prices also fell as the euro lost ground against the
dollar, pulling back from a two-month high. Investors were
betting recent gains went too far, too fast as upcoming results
of stress tests on European banks loom. []
Allaying anxiety over some euro zone sovereign debt Greece
said it almost halved its central government budget deficit in
the first six months of the year. Drastic spending cuts
outweighed weaker than expected tax revenues. []
"The sovereign risk situation has eased," said Peter
Fertig, a consultant at Quantitative Commodity Research.
"Indications for bank stress tests are positive, which also
indicates fears have been overdone," he added.
In the meantime the world's largest bullion exchange-traded
fund, New York's SPDR Gold Trust <GLD>, reported a 1.5-tonne
fall in its holdings on Friday, which reflected reduced
appetite for gold. Its total holdings have fallen nearly 6
tonnes so far in July. []
Physically backed ETFs found favour with investors in the
financial crisis, seen as a safe haven at a time other assets
classes were prone to quickly losing value. Inflows especially
surged in early 2009 and the second quarter of 2010.
Data released by the Commodity Futures Trading Commission
also showed non-commercial net long positions in New York gold
futures and options fell 41,642 to 231,381 in the week to July
6. []
Graphic:http://link.reuters.com/fud27m
Among other precious metals, spot silver <XAG=> slid to
$17.89 an ounce by 2:32 a.m. EDT (1832 GMT) from $18.06 late in
the previous session; platinum <XPT=> was down at $1,510.50 an
ounce from $1,529 previously; and palladium <XPD=> gave up
ground to $450.38 per ounce, down from $456.50 at the previous
finish.
Prices at 3:00 p.m. EDT (1657 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1198.70 -11.10 -0.9% 9.4%
US silver <SIU0> 17.917 -0.156 0.0% 6.4%
US platinum <PLV0> 1515.30 -17.90 -1.2% 3.0%
US palladium <PAU0> 454.15 -2.80 -0.6% 11.1%
Gold <XAU=> 1198.85 -13.00 -1.1% 9.3%
Silver <XAG=> 17.89 -0.17 -0.9% 6.2%
Platinum <XPT=> 1510.00 -19.00 -1.2% 3.0%
Palladium <XPD=> 450.50 -6.00 -1.3% 11.1%
Gold Fix <XAUFIX=> 1205.50 1.75 0.1% 9.2%
Silver Fix <XAGFIX=> 18.06 19.00 1.1% 6.3%
Platinum Fix <XPTFIX=> 1526.00 2.00 0.1% 4.1%
Palladium Fix <XPDFIX=> 456.00 2.00 0.4% 13.4%
(Additional reporting by Jan Harvey in London;Editing by
Sofina Mirza-Reid )
