* Equities, oil, euro slip on concerns over economic outlook
* Coming up: U.S. July existing home sales data, 1400 GMT
* Platinum underperforms palladium as both retreat
(Updates prices)
By Jan Harvey
LONDON, Aug 24 (Reuters) - Gold prices slipped in Europe on
Tuesday to their lowest in more than a week, caught up in
selling of other assets such as equities, oil and the euro, as
investors fretted over the outlook for the global economy.
While these concerns are likely to support gold in the
medium run, gold is being sold in the short term to cover losses
on other markets, analysts said.
Spot gold <XAU=> touched a low of $1,216.40 an ounce and was
bid at $1,217.60 an ounce at 1209 GMT, against $1,223.40 late in
New York on Monday. U.S. gold futures for December delivery
<GCZ0> fell $9.00 an ounce to $1,219.50.
Gold hit a 1-1/2 month high at $1,237.15 an ounce last week
as concerns over the global economic recovery fuelled interest
in the metal as a haven from risk, but has since retreated.
"Last week as we started to see euro zone risk rise, there
was a pick-up in defensive buying out of Europe," said Credit
Suisse analyst Tom Kendall. "But with everything else sliding
lower, and the dollar coming back a bit, it is struggling."
"But I don't think it is going to struggle for too long with
this risk-aversion environment," he added. "Money is going to
continue flowing into longer-dated Treasuries and gold."
European shares fell to one-month lows on Tuesday, tracking
losses overnight in Asia, as investors worried about an anaemic
global recovery. U.S. stock index futures also pointed to a
lower opening on Wall Street. []
On the bond markets, September Bund futures <FGBLc1> hit a
record high of 133.40. Bund futures have risen more than 500
ticks since July 27 as the global outlook deteriorated.
[]
Such concerns also weighed on industrial commodities, with
crude oil falling more than 1 percent and base metals like
copper, zinc and nickel also sliding. [] []
The dollar hit six-week highs against the euro. Strength in
the U.S. unit typically weighs on gold, curbing its appeal as an
alternative investment and making dollar-priced assets more
expensive for other currency holders. []
YEN SCALES PEAKS
Meanwhile, the yen hit a 15-year high against the dollar and
a nine-year peak versus the euro as investors tested the resolve
of Japanese authorities to intervene and stem the yen's rise.
"This week we've seen some liquidation (of gold) come to the
fore on Tocom, with some of the Japanese investors repatriating
cash into yen," Kendall noted.
Investors will be closely watching U.S. existing home sales
data for July, due for release at 1400 GMT, for its impact on
the financial markets.
"They are widely expected to fall sharply, reflecting the
sharp declines already seen in property deal signings after the
expiry of tax incentives to buyers," Credit Agricole said in a
note.
"With the mood of the market currently, however, the fact
that the drop was expected will not prevent the spin from being
gloomy," it added.
Further concerns about the strength of the economic recovery
could spark new interest in gold as a safe haven, analysts said.
Silver <XAG=> was at $17.84 an ounce versus $17.93, platinum
<XPT=> was at $1,493 an ounce versus $1,504.50 and palladium
<XPD=> at $476.50 against $481.
Platinum and palladium are chiefly used in autocatalysts,
and have been heavily exposed to the global economic slowdown.
However, palladium has slightly outperformed platinum, as its
potential for demand growth is seen as stronger.
Palladium prices have slipped only 2.9 percent this month so
far, compared with a near 5 percent drop in platinum prices. In
the year to date, palladium has risen 17.5 percent, compared
with a 1.4 percent rise in platinum prices.
(Reporting by Jan Harvey; Editing by Alison Birrane)
