* Gold retreats sharply on technical sell signal
* Gold to see downward correction before resuming up-trend
* Coming up: U.S. June consumer confidence on Tuesday
(Recasts, updates prices to market close)
By Frank Tang
NEW YORK, June 28 (Reuters) - Gold retreated 1 percent on
Monday on a technical sell-off and weaker safe-haven buying,
after an initial rally fizzled that would have lifted gold to
an all-time high.
Rick Bensignor, chief market strategist at investment
banking group Execution Noble LLC, said a technical sell signal
triggered pullback based on a high reading of the TD sequential
indicator, which institutional players used to help define
exhaustion of trends.
"With that in place, institutional players would definitely
be more apt to be selling gold or 'shorting' gold as a trade,"
Bensignor said.
Bensignor said gold's daily sentiment index was also at an
extremely high 90 percent bullish on Monday, and that added to
the metal's vulnerability.
Spot gold <XAU=> was at $1,240.45 an ounce by 2:33 p.m. EDT
(1833 GMT), compared with $1,253.40 in New York on Friday.
Gold sharply came off from a high of $1,262.45 earlier in
the session, less than $3 under its all-time high at $1,264.90
an ounce set a week ago, as economic jitters pressured the euro
and global equity markets.
Analysts, however, said gold should be supported by
investors' concerns 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.
Maintaining the bullish undertone for gold were comments
from U.S. intelligence officials that Iran has enough fissile
material for two atomic bombs, traders said. []
Global equity markets were largely unperturbed after world
leaders abandoned a global bank levy and eased the timetable
for new capital requirements at this weekend's G20 summit.
[]
"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."
U.S. gold futures for August delivery <GCQ0> settled down
$17.60, or 1.4 percent, to $1,238.60 an ounce.
U.S. DATA IGNORED
Gold was little moved by data showing 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.
[]
On the technical front, Reuters market analyst Wang Tao
said spot gold <XAU=> may correct to $1,166.50 per ounce in
July as chart signals turn bearish with a leading diagonal
pattern in formation and an appearance of a bearish divergence
on the Relative Strength Index (RSI) indicator.
For a graphic:http://link.reuters.com/jyd64m
Among other precious metals, silver <XAG=> was at $18.77 an
ounce, from $19.04 late in New York on Friday, while in the
platinum group metals complex, platinum <XPT=> was down 0.2
percent at $1,564 and palladium <XPD=> was down about 1.4
percent at $466.50.
Prices at 2:38 p.m. EDT (1824 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1238.60 -17.60 -1.4% 13.0%
US silver <SIN0> 18.678 -0.432 0.0% 10.9%
US platinum <PLN0> 1565.60 -4.80 -0.3% 6.4%
US palladium <PAU0> 472.45 -5.45 -1.1% 15.6%
Gold <XAU=> 1239.45 -13.95 -1.1% 13.1%
Silver <XAG=> 18.77 -0.27 -1.4% 11.5%
Platinum <XPT=> 1564.00 -2.50 -0.2% 6.7%
Palladium <XPD=> 466.50 -8.00 -1.7% 15.0%
Gold Fix <XAUFIX=> 1261.00 5.00 0.4% 14.2%
Silver Fix <XAGFIX=> 19.11 46.00 2.5% 12.5%
Platinum Fix <XPTFIX=> 1581.00 3.00 0.2% 7.8%
Palladium Fix <XPDFIX=> 481.00 1.00 0.2% 19.7%
(Additional reporting by Amanda Cooper in London; Editing by
Sofina Mirza-Reid)
