* Dollar extends gains after U.S. goods data
* Commodities fall after gains earlier this week
* SPDR gold ETF posts fresh outflow
(Updates prices, adds comment, detail)
By Jan Harvey and Martina Fuchs
LONDON, July 29 (Reuters) - Gold fell to a two-week low in
Europe on Wednesday as rising risk aversion boosted the dollar,
prompting losses across commodities, with platinum reversing
recent gains to slide more than 2 percent.
Spot gold <XAU=> hit a low of $929.60 an ounce and was bid
at $930.10 an ounce at 1356 GMT, against $936.65 late in New
York on Tuesday.
U.S. gold futures for August delivery on the COMEX division
of the New York Mercantile Exchange <GCQ9> slipped $8.70 to
$930.40 an ounce.
The dollar <.DXY> extended gains against a currency basket
on Wednesday after a U.S. government report showed new durable
goods orders fell more than expected in June, weighing on risk
appetite already battered by a fall in Chinese equities. []
VTB Capital analyst Andrey Kryuchenkov said the weak durable
goods numbers had depressed stock markets and pushed the dollar
higher. "(Gold) trades on the dollar and equities," he said.
"There will be a moment of volatility because the end of the
week sees more data coming out," he said. "I think we can hold
on $925 -- there is pretty good support there -- and I think we
will not get lower than $920."
Precious metals fell along with many other commodities, such
as oil and copper, in early trade after a 5 percent slide in
Chinese equities hit risk appetite and lifted the dollar versus
a basket of currencies.
Chinese stocks <> dropped by the most in eight months
on Wednesday, ending a five-day rally, on concerns banks could
restrict lending. []
"There is some concern that the (Chinese) government could
try to tighten up credit conditions in China, which could be
negative for lots of stock markets and therefore positive for
gold," Daniel Smith, an analyst at Standard Chartered, said.
SLOW DEMAND
Investment demand for gold remained lacklustre, with a
further 3.36-tonne outflow from the world's largest
bullion-backed exchange-traded fund, the SPDR Gold Trust, adding
to a recent retreat in ETF holdings. []
Physical demand for gold remains soft overall, with seasonal
weakness and high prices hurting consumption in the key Indian
and Middle Eastern markets. This weakness in underlying demand
makes gold vulnerable to a sell-off, analysts said.
"Given the recent build in speculative longs and ETF
redemptions yesterday, combined with very limited physical
interest, gold remains vulnerable to a deeper correction," James
Moore, an analyst at TheBullionDesk.com, said in a note.
On the supply side, the World Gold Council said official
sector sales under the Central Bank Gold Agreement currently
stand at just 140 tonnes so far this year, well below the total
500 tonnes allowed under the pact. []
Among other precious metals, platinum <XPT=> fell more than
2 percent to a low of $1,162, and was later at $1,167 an ounce
against $1,192.50. Palladium <XPD=> was at $252 against $256.50.
The two metals climbed to multi-week highs earlier this week
as firmer stocks boosted hopes demand for the autocatalyst
materials would pick up. However, analysts say the uptick in the
dollar is being used as an opportunity to take profits.
Silver <XAG=> was at $13.50 an ounce against $13.69.
(Editing by Sue Thomas)
