* Gold eases ahead of stress tests, Thai holders sell
* For the technicals on gold, click []
* Coming Up: Euro zone bank stress test results; 1600 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, July 23 (Reuters) - Gold steadied on Friday
despite gains in equities as investors took to the sidelines
before the release of European bank stress test results, which
seek to restore confidence in the euro zone banking sector.
Major listed lenders are expected to pass, while the tests
may show the biggest problems lie with smaller, mainly unlisted
players like Germany's Landesbanks and Spain's cajas. The
results are due out at 1600 GMT. []
Spot gold <XAU=> was up $1.00 to $1,196.35 an ounce by 0630
GMT after rising as high as $1,200.10 on Thursday as strong
corporate earnings and rallies in equities spurred buying.
Gold may retrace if the stress test shows broadly positive
results, though some traders suggest the metal's safe-haven
appeal will remain largely intact on an uncertain global
economic outlook.
"If it's good, I am not totally convinced that gold would
sell off particularly. It may fall back it down into the
$1,180s, but I can't really at this stage see why that would
cause it to go much lower," said Darren Heathcote, head of
trading at Investec Australia.
"But on the other hand, I still see the potential for it to
go higher if it is a bad result. I feel we are going to be
reasonably neutral."
Bullion roared to a lifetime high at $1,264.90 in late June
on fears the euro zone debt crisis was spreading and the U.S.
economy was slowing.
U.S. gold futures for August delivery <GCQ0> barely moved
at $1,195.1 an ounce ahead of the stress test results, which
will also reveal holdings of government debt owned by European
banks.
Jewellers were on the sidelines, with price still hovering
near $1,200 despite a correction. "The market is dead and we
see light selling from Thailand," said a physical dealer in
Singapore.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P>, said its holdings fell to 1,302.046 tonnes
by July 22 from 1,308.128 on July 20. The holdings hit a record
at 1,320.436 tonnes on June 29.
Japan's Nikkei average rose more than 2 percent on Friday,
poised to snap a five-day losing streak, as U.S. stocks jumped
after earnings from economic bellwethers 3M, UPS and
Caterpillar shed some of their fears about the strength of the
recovery. [] []
The euro dipped to the day's low against the dollar after a
newspaper report said several of Spain's 18 savings banks have
failed tests to see how strong they would be if economic
circumstances were more adverse. []
"I think if the results are good, the Dow will go up while
gold will initially track the euro higher before falling again.
I guess movements in the dollar will dominate the trade for the
time being," said a dealer in Hong Kong.
"Long-term sentiment is still bullish, unless ETF holdings
keep falling. If the holdings fall below 1,300 tonnes, then
it's alarming. People will get rid of gold and buy shares."
Crude prices slipped from an 11-week high to stay near $79
on Friday, as uncertainty about European bank stress tests and
U.S. oil demand tempered a boost from positive corporate
results and storm threats. []
Precious metals prices at 0601 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1194.70 -0.65 -0.05 9.04
Spot Silver 18.08 0.01 +0.06 7.43
Spot Platinum 1531.00 9.90 +0.65 4.36
Spot Palladium 457.00 3.00 +0.66 12.70
TOCOM Gold 3351.00 60.00 +1.82 2.82
37443
TOCOM Platinum 4317.00 112.00 +2.66 -1.46
15419
TOCOM Silver 51.30 1.70 +3.43 -0.77
401
TOCOM Palladium 1286.00 49.00 +3.96 10.39
205
Euro/Dollar 1.2876
Dollar/Yen 86.91
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Ed Lane)
