* Gold slips on technical selling as initial rally fizzles
* SPDR gold ETF sees biggest outflow in a year in July
* Palladium breaks $500/oz to highest since May 17
* Coming up: U.S. pending home sales due Tuesday
(Recasts, adds comments, updates prices, adds NEW YORK to
dateline, second byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 2 (Reuters) - Gold turned lower on
Monday despite broad metals and commodity gains amid economic
optimism, as technical selling put a damper on bullion's
initial rise.
Silver and platinum group metals, however, climbed on
positive economic sentiment amid sharp industrial metal gains,
while crude oil jumped nearly $3 to above $81 per barrel and as
the euro hit its highest level since early May.
In early sessions, gold rose toward $1,200 an ounce, as
rallies in other markets stirred fund buying. Wall Street
rallied more than 2 percent on strong corporate earnings.
George Nickas, commodities broker at FC Stone, said gold
rose in early sessions on hopes of economic recovery, but
technical selling were still pressuring prices.
"The gold market is undecided whether it wants to follow
the strength in the industrial metals. If you look only at the
gold chart, this is a rally in a down-trending market, so it
attracted profit taking," Nickas said.
"Last week, the August contract going into first-notice day
was extremely weak, and gold traders haven't shrugged that off
yet," he said.
Gold lost about 5 percent in July and was among the top
percentage losers in the commodities complex.
Analysts said the metal is at risk of falling sharply after
breaking below a two-year bullish support channel.
(Graphic: http://link.reuters.com/wyw52n)
Spot gold <XAU=> rose as high as $1,190.40 an ounce and was
last at $1,179.95 an ounce at 12:28 p.m. EDT (1628 GMT),
against $1,181.50 late in New York on Friday. U.S. gold futures
for December delivery <GCQ0> slipped $2.10 to $1,181.80.
Simon Weeks, head of precious metals at the Bank of Nova
Scotia, said gold in early sessions had risen above the 100-day
moving average at $1,183 an ounce on the back of currency moves
and rising oil prices.
However, he added gold remained vulnerable to losses,
especially if equity markets continued to climb. "People will
liquidate safe havens and put risk on," he said.
Gold managed to arrest a slide that last week took it to a
three-month low of $1,156.90 an ounce and then turn higher in
its best run since late May.
Investment in gold has ebbed recently, however, as assets
seen as higher risk such as stocks have firmed.
The world's largest bullion exchange-traded fund, the SPDR
Gold Trust <GLD>, reported its biggest outflow in a year last
month, with holdings down more than 38 tonnes in July to
1,282.3 tonnes. []
Other assets seen as higher risk also rose, with oil prices
climbing nearly 3 percent above $80 on Monday as macroeconomic
indicators in top energy consumers the United States and China
showed slower but sustained growth. []
DOLLAR WEAK, EURO NEARS $1.32
Despite the Wall Street rally, fears the U.S. recovery is
faltering drove the dollar to a three-month low against a
basket of currencies, while the euro <EUR=> neared $1.32 for
the first time since early May. []
Lower prices, meanwhile, encouraged higher gold demand from
key bullion-consuming centers China, India and the Middle East.
[] [] []
The World Gold Council said the International Monetary Fund
sold 17.4 tonnes of gold in June as part of a planned program
of bullion sales. That leaves 120.2 tonnes of gold still to be
sold under the program. []
Silver <XAG=> was up by over 2 percent at $18.34 an ounce
versus $17.96, making this its strongest one-day performance
since early June, while its ratio to gold -- or how many ounces
of silver are needed to buy an ounce of gold -- hit its lowest
since mid-May at 65.0.
Platinum <XPT=> was at $1,592 an ounce against $1,566.55,
while palladium <XPD=> was at $510 against $491, having hit its
highest since mid-May earlier in the day.
Prices at 12:44 p.m. EDT (1644 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCZ0> 1182.90 -1.00 -0.1% 7.9%
US silver <SIU0> 18.350 0.347 2.0% 9.0%
US platinum <PLV0> 1599.80 23.00 1.5% 8.8%
US palladium <PAU0> 512.75 12.75 2.6% 25.4%
Gold <XAU=> 1180.60 -0.90 -0.1% 7.7%
Silver <XAG=> 18.31 0.35 1.9% 8.7%
Platinum <XPT=> 1591.50 24.95 1.6% 8.6%
Palladium <XPD=> 509.63 18.63 3.8% 25.7%
Gold Fix <XAUFIX=> 1188.50 10.50 0.9% 7.7%
Silver Fix <XAGFIX=> 18.11 45.00 2.5% 6.6%
Platinum Fix <XPTFIX=> 1587.00 1.00 0.1% 8.3%
Palladium Fix <XPDFIX=> 501.00 3.00 0.6% 24.6%
(Reporting by Frank Tang in New York and Jan Harvey in London;
Editing by Sofina Mirza-Reid)
