* 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 declines were limited as levels
below $1,200 an ounce attracted bargain hunters.
Spot gold <XAU=> fell to $1,182.85 an ounce by 1521 GMT from
$1,189.05 late on Friday. In the previous session gold briefly
crossed $1,200 before falling sharply. By comparison, the
lifetime high had reached $1,264.90 in early June.
Seven out of 91 banks failed the test. Investors appeared
content with the results as the euro rose against the dollar,
despite some concerns 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 on gold today."
European shares and U.S. stocks gained ground, particularly
after data showed sales of new U.S. single-family homes
rebounded in June from the prior month's record low. [] []
[]
Underlying concerns about the health of the European economy
continued to bolster gold, however, analysts said.
"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."
Activity on the physical market could pick up in August with
the start of the festival season in major jewellery consumer
India, but premiums for gold bars in Asia were steady on Monday.
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PLATINUM/PALLADIUM RALLY
Platinum earlier rose to its strongest in a month on fund
buying driven by gains in equities. []
Platinum <XPT=> reached as high as $1,552.50 an ounce, its
highest since late June, and later traded at $1,542 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 $470 an ounce versus
$464.55.
Analysts see platinum prices rising as a gradual economic
recovery leads to increased demand for the auto catalyst 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> dropped by
added $5.90 to $1,181.90 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 $18.06 versus $18.08 on Friday.
(Additional reporting by Lewa Pardomuan in Singapore; editing
by James Jukwey and Jane Baird)
