* Coming up: outcome of European bank stress tests on Friday
* Equities up in Europe, New York as risk appetite rises
* Lonmin reports near halving of Q3 refined platinum sales
(Releads, updates prices)
By Jan Harvey
LONDON, July 22 (Reuters) - Gold rose briefly back above
$1,200 an ounce on Thursday as financial markets rallied
broadly, with U.S. stocks jumping 1 percent at the open,
European shares higher and oil prices climbing 2.3 percent.
The precious metal quickly slipped back below that level,
however, as it struggled to break out of the relatively tight
range it has kept to ahead of the results of European bank
stress tests on Friday.
Spot gold <XAU=> was bid at $1,198.90 an ounce at 1406 GMT,
against $1,191.80 late in New York on Wednesday. U.S. gold
futures for August delivery <GCQ0> rose $7.50 to $1,199.30.
Gains in gold, which is often seen as a haven from risk,
have been limited by 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."
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, U.S. stocks jumped at the open and
European shares rose on Thursday as confidence was boosted by
upbeat earnings, while banks rose ahead of the stress test
results. [] []
Rising equities and better-than-expected European data
lifted appetite for risk, weighing on the dollar, which fell 0.9
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 $18.12 an
ounce against $17.77, platinum <XPT=> at $1,522.60 an ounce
against $1,521, and palladium <XPD=> at $453.15 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 Alison Birrane)
