* Gold falls but still near highs; safe haven fears support
* May see downward correction before resuming uptrend
(Updates with price direction)
By Amanda Cooper
LONDON, June 28 (Reuters) - Gold eased on Monday, erasing
earlier gains after equities turned positive and the euro fell
broadly, although persistent concern about European debt and
wariness over the economic outlook would likely limit losses.
Gold earlier neared session highs, when the euro came under
broad pressure and stocks on Wall Street reversed a slide to
turn positive, which knocked over $10 off the bullion price.
But investor caution over the levels of euro zone debt and
the stability of the region's banking system persisted.
"Really the big driver is investor perception, investor risk
appetite and do we see any nervousness over the European (debt)
issue," said Societe Generale analyst David Wilson.
"Sentiment is still quite brittle, so we can get intraday
moves in either direction, but the longer gold stays above
$1,250 and consolidates, the more likely we are for a leg up
rather than a leg down," he said.
Spot gold <XAU=> was last down at $1,248 an ounce, by 1515
GMT, compared with $1,253.40 in New York on Friday and down from
a session high of $1,262.45. Prices hit an all-time high of
$1,264.90 an ounce last Monday. U.S. gold futures for August
delivery <GCQ0> were down $6.90 to $1,249.30 an ounce.
Maintaining the bullish undertone for gold were comments
from U.S. intelligence officials that Iran has enough fissile
material for two atomic bombs. []
Gold came under pressure from a rise in the dollar against
the euro, as bullion's traditional inverse relation to the
greenback re-established itself, while the broader markets were
largely unperturbed by the weekend's meeting of G20 leaders.
"These are high prices to buy gold at," said one trader.
"Technically, the upward trend is intact, but when you near
record highs, trade is always jittery," the trader added.
SAFE HAVEN SWEEP
Volatile equities and the broad decline in the euro have
reinvigorated the safe-haven sweep into both the U.S. currency
<.DXY> and gold, prompting the two to move in tandem in the past
few weeks.
"The underlying safe-haven concerns that have supported
prices -- the economic environment, Europe's fiscal outlook and
the longer-term prospects for inflation, remain," said David
Moore, commodities strategist at Commonwealth Bank of Australia.
"The G20 hasn't had a significant impact on markets, and
while concerns about Iran's nuclear capacity are nothing new,
there seems to be additional clarity."
With this in mind, gold could rise further to surpass the
June 21 record at $1,264.90 per ounce to touch $1,270, as
bullish momentum is strong, according to Reuters technical
analyst Wang Tao.
He noted the bulls were taking control, with prices in an
ascending channel from a $1,224.30 low struck last Wednesday and
sharp rises and mild falls. []
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Gold was little moved by data that showed U.S. consumer
spending rose more than expected in May, even as savings touched
their highest in eight months, while a measure of inflation
showed fairly muted core price pressures. []
However, a continued contraction in physical demand from
traditional end-users could undermine gold, at least in the
short-term, analysts said.
The head of the Bombay Bullion Association said on Monday
gold imports into top consumer India were likely to have fallen
by 75 percent in June from 29.9 tonnes a year ago.
Suresh Hundia, president of BBA, told Reuters this bearish
estimate could be overly optimistic and the final figures could
be lower than this. "The numbers are so bad, nobody wants to
share it this time," he said, referring to the importing banks
and trading agencies, which contribute their data to the trade
body. []
While consumer demand has been dampened by gold prices near
record highs, concern about the stability of the wider financial
markets has fed demand for gold-related investment vehicles.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P> said its holdings remained unchanged at an
all-time high at 1,316.177 tonnes. []
Silver <XAG=> was flat at $19.03 an ounce, from $19.04 late
in New York on Friday, while in the platinum group metals
complex, platinum <XPT=> was up 0.1 percent at $1,568.50 and
palladium <XPD=> was down about 0.7 percent at $471.15.
(Editing by James Jukwey)
