* Gold pressured as strong US home sales data lifts stocks
* Safe-haven demand fades after European bank stress tests
* Coming Up: U.S. Case/Shiller housing index due Tuesday
(Recasts, updates prices, market activity; adds second byline,
dateline, previously LONDON)
By Frank Tang and Rebekah Curtis
NEW YORK/LONDON, July 26 (Reuters) - Gold fell on Monday
after strong U.S. home sales data boosted equities and limited
the precious metal's safe-haven appeal, but the dip below
$1,200 an ounce drew physical demand, limiting losses.
The metal was hovering just above a bullish chart support,
but analysts said a sharp price decline could happen in an
overly bullish gold futures market held up largely by
short-term, speculative investors.
Bullion was pressured as U.S. stocks gained ground after
data showed sales of new U.S. single-family homes rebounded in
June from May's record low. [] [][]
Spot gold <XAU=> was at $1,183.75 an ounce by 1:44 p.m. EDT
(1744 GMT), down from $1,189.05 late on Friday. In the previous
session gold briefly crossed $1,200 before finished lower. The
metal was sharply below the lifetime high had reached $1,264.90
in early June.
U.S. gold futures for August delivery <GCQ0> were down
$3.80 at $1,184 an ounce.
Gold lost some safe-haven appeal after Friday's European
banks stress test showed no nasty surprises.
Financial markets appeared content with the results that
seven out of 91 banks failed the stress tests despite some
concerns the test had not been rigorous enough, as the euro
rose toward the $1.30 level. []
"A small number of banks failed," said Daniel Major, an
analyst at RBS Global Banking & Markets. "It brings nearby
stabilization to risk appetite, and that's having a bit of an
impact on gold today."
Underlying concerns about the health of the European
economy should continue 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."
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, U.S. CFTC's trade data
showed. []
Still, Rick Bensignor, chief market strategist at
investment banking group Execution Noble, said that the
noncommercial long-to-gold ratio was a very high 5 to 1.
"That's why we are warning of extreme caution on long
positions. The only significant buyers on the way down will be
commercials covering shorts, when and if they choose to,"
Bensignor said.
Gold was trading about $4 above at its 100-day moving
average at $1,181 an ounce, but some analysts suggested the
metal was near a natural entry point above its key chart
support. (Graphic:http://link.reuters.com/tyz59m)
Analysts also said that activity on the physical market
could pick up in August with the start of the festival season
in major jewelry consumer India. []
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 was at $1,550.50 an ounce versus
$1,539.45 on Friday.
Palladium <XPD=> hit a session high of $476 an ounce, its
highest since June 28, and was at $471.70 an ounce versus
$464.55.
Analysts see platinum prices rising as a recovering
automobile industry boosts demand for the auto catalyst metal,
but the optimism has lessened after a hefty correction in May,
a Reuters poll showed. []
Silver <XAG=> was at $18.16 versus $18.08 on Friday.
Prices at 1:47 p.m. EDT (1747 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCQ0> 1183.30 -4.50 -0.4% 7.9%
US silver <SIU0> 18.185 0.084 0.5% 8.0%
US platinum <PLV0> 1556.30 13.50 0.9% 5.8%
US palladium <PAU0> 474.55 7.80 1.7% 16.1%
Gold <XAU=> 1183.55 -5.50 -0.5% 8.0%
Silver <XAG=> 18.15 0.07 0.4% 7.8%
Platinum <XPT=> 1551.00 11.55 0.8% 5.8%
Palladium <XPD=> 471.70 7.15 1.5% 16.3%
Gold Fix <XAUFIX=> 1183.50 -5.50 -0.5% 7.2%
Silver Fix <XAGFIX=> 18.01 -16.00 -0.9% 6.0%
Platinum Fix <XPTFIX=> 1546.00 5.00 0.3% 5.5%
Palladium Fix <XPDFIX=> 477.00 1.00 0.2% 18.7%
(Additional reporting by Rebekah Curtis in London, Lewa
Pardomuan in Singapore; Editing by David Gregorio)
