* Levels below $1,200 attract some bargain hunters
* For a technical on gold, click: []
* Coming Up: U.S. New home sales June; 1400 GMT
(Releads, updates prices, adds comment)
By Rebekah Curtis
LONDON, July 26 (Reuters) - Gold softened on Monday, losing
some of its safe-haven appeal after a European banks stress test
showed no nasty surprises, but physical buying offered support
as levels below $1,200 an ounce attracted bargain hunters.
Seven out of 91 banks failed the test, with investors
appearing content with the results and the euro rising against
the dollar, despite some concerns that the test had not been
rigorous enough. [] []
"A small number of banks failed," said Daniel Major, an
analyst at RBS Global Banking & Markets. "It brings nearby
stabilisation to risk appetite and that's having a bit of an
impact of gold today."
Equities rallied, boosted by robust U.S. company earnings
and surprisingly vigorous euro zone economic data. []
[]
Spot gold <XAU=> traded at $1,186.95 an ounce by 1225 GMT
from $1,189.05 late on Friday. In the previous session gold
briefly crossed $1,200 before falling sharply.
Gold struck a lifetime high at $1,264.90 in early June.
For a 24-hour gold technical outlook, see:
http://graphics.thomsonreuters.com/WT/20102607085845.jpg
"The factors pushing gold haven't gone away," said Robin
Bhar, an analyst at Credit Agricole, citing sovereign debt, the
outlook for inflation and the devaluation of currencies.
"They're just probably not going to be in focus now the
stress tests have been done and concerns about the banks and the
overall level of debt have been eased for the time being."
Analysts reported that strength in the physical market was
helping prices to find a floor.
PLATINUM/PALLADIUM RALLY
Platinum earlier rose to its strongest in a month on fund
buying driven by gains in equities. Asian shares rose on solid
U.S. corporate earnings and strong euro zone data. []
Platinum <XPT=> reached as high as $1,552.50 an ounce, its
highest since late June, and later traded at $1,539 an ounce
versus $1,539.45 on Friday.
Palladium <XPD=> hit a session high of $476 an ounce, its
highest since June 28, and later traded at $472.50 an ounce
versus $464.55.
Analysts see platinum prices rising as a gradual economic
recovery leads to increased demand for the autocatalyst metal,
but some of the euphoria that lifted forecasts earlier this year
has evaporated after a hefty correction in May, a Reuters poll
showed. []
U.S. gold futures for August delivery <GCQ0> added $1.2 to
$1,189 an ounce after settling nearly $8 lower following the
European stress tests.
Money managers cut their long, or bullish exposure, to U.S.
gold futures by 18 percent for the week to July 20 as the
metal's prices hit two-month lows, trade data on Friday showed.
[]
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P> said its holdings were unchanged at 1,302.046
tonnes. The holdings hit a record at 1,320.436 tonnes on June
29.
Silver <XAG=> was at $18.05 versus $18.08 on Friday.
Investors will keep an eye on U.S. new home sales data for
June, due at 1400 GMT.
(Additional reporting by Lewa Pardomuan in Singapore; editing
by Alison Birrane and James Jukwey)
