* Equities up in Europe, New York as risk appetite rises
* Coming up: outcome of European bank stress tests on Friday
* Lonmin reports near halving of Q3 refined platinum sales
(Updates prices, adds background, comment)
By Jan Harvey
LONDON, July 22 (Reuters) - Gold prices fell below $1,190 an
ounce in Europe on Thursday as rising stock markets reflected
sharper appetite for risk, and as investors awaited the outcome
of European bank stress tests at the end of the week.
Spot gold <XAU=> was bid at $1,185.35 an ounce at 1238 GMT,
against $1,191.80 late in New York on Wednesday. U.S. gold
futures for August delivery <GCQ0> fell $6.30 to $1,185.50.
Gold, which is often seen as a haven from risk, is under
pressure from expectations that most banks will pass the stress
tests, which will assess how banks will fare if economic
conditions worsen, and from a retreat in sovereign risk fears.
"There is no apparent trigger for gold to move higher at the
moment, especially with the situation in Europe a bit more under
control," said Bank of America-Merrill Lynch analyst Michael
Widmer. "Against that backdrop, we have been drifting lower."
He said if bank stress test results reassure the market, "it
would have a more positive impact on the cyclical metals like
the base metals, and a less positive impact on gold."
On the wider markets, European shares rose on Thursday as
confidence was boosted by upbeat earnings, while banks rose
ahead of the stress test results. U.S. stock index futures
pointed to a higher opening on Wall Street. [] []
Rising equities and better-than-expected European data
lifted appetite for risk, weighing on the dollar, which fell 0.8
percent against a basket of currencies <.DXY>. []
Sharper risk appetite and a retreat in concerns over the
health of the European financial sector has pressured gold from
the record $1,264.90 an ounce it hit in June. An attempted move
back up to $1,200 was short-lived on Wednesday.
"The way we got rejected yesterday at $1,200 indicates that
there are sellers out there who are looking for an opportunity
to reduce exposure," said Saxo Bank senior manager Ole Hansen.
GOLD AWAITS DIRECTION
Gold is struggling for direction as formerly strong concerns
over debt levels retreat in the euro zone's Portugal, Italy,
Ireland, Greece and Spain.
"That is not to say that the situation in Europe is
no longer important for gold prices," said Natixis in a note.
"It can drive gold prices lower or higher, dependent on whether
the situation is genuinely improving or whether this is merely a
hiatus before a subsequent crash."
"But in a period of relative calm in Europe, the gold market
has lost one of its previously clear price signals. We are
therefore left searching for a new anchor for gold prices."
In supply news, Russian miner Petropavlovsk <POG.L> said it
expects annual gold output to be at the lower end of the
previous guidance of 670,000 to 760,000 ounces after first-half
production fell 26 percent. []
Among other precious metals, silver <XAG=> was at $17.67 an
ounce against $17.77, platinum <XPT=> at $1,512.50 an ounce
against $1,521, and palladium <XPD=> at $449.53 against $449.50.
The world's number three platinum producer Lonmin, which
operates in South Africa, said its third-quarter refined
platinum sales nearly halved following the closure of its main
furnace. []
Standard Chartered said in a note that it expects
constraints on South African supply to persist. Platinum group
metals output in April was weak, it said.
(Reporting by Jan Harvey; editing by Keiron Henderosn)
