* Gold falls below $1,200, nears lowest since end-May
* Higher equity prices increase investor risk appetite
* For technical review on gold, click []
(Updates prices, comment. Changes lead, headline, dateline,
byline.)
By Carole Vaporean and Amanda Cooper
NEW YORK/LONDON, July 8 (Reuters) - Gold prices fell back
below $1,200 an ounce on Thursday, nearing the previous
session's six-week low as growing appetite for risk led some
investors to sell the yellow metal, though volume was light.
"The risk appetite is increasing again," said Jesper
Dannesboe, senior commodity strategist at Societe Generale.
"Stocks, base metals are all rallying across the board."
"It's been very profitable to buy gold from the dips, so I
wouldn't dare say don't do it anymore," he added.
Global equities <.MIWD00000PUS> rose to their highest in
seven trading sessions, with Wall Street stocks climbing after
U.S. retail chains reported stronger-than-expected sales for
June. The better store sales reinforced confidence in the
upcoming quarterly earnings season, giving investors reason to
unwind their safe-haven investments in gold. []
Spot gold <XAU=> stood at $1,197.25 an ounce by by 2:47
p.m. EDT (1847 GMT) compared with $1,201.85 late Wednesday in
New York, when it fell to $1,185.05, its lowest since May 25
and around 6 percent below late June's record high.
U.S. gold futures for August delivery <GCQ0> closed down
$2.80 at $1,196.10 an ounce.
Because technical support from the previous session's lows
remained intact, some analysts said they thought gold would
continue to orbit $1,200 an ounce until clearer directional
signals developed.
"I think until the market moves more fundamentally in one
direction or the other, $1,200 will be the fluctuation point,"
said James Steel, precious metals analyst at HSBC in New York.
Technical traders said that a break of that $1,185
6-1/2-week low could prompt more selling and a decline to
$1,166 an ounce.
Gold prices hit lifetime highs above $1,260 an ounce last
month, fueled by concern the European debt crisis would spread
and the U.S. economy was slowing.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on commodity performances so far this year,
please click on this link:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
CALM RETURNS
A lot of gold-supportive nervousness in the market had also
stemmed from concern that debt-laden nations such as Portugal,
Spain or Greece would be unable to access funding.
But a series of solid government bond auctions from both
peripheral and core euro zone states, and the smooth repayment
of nearly half a trillion euros' worth of emergency one-year
loans by banks to the ECB last week went a long way towards
soothing that concern.
Helping to keep gold relatively stable at the lower levels
was a pick-up in consumer activity in key buying regions in
line with the pullback in the price.
The physical sector saw buying interest from Indonesia and
Thailand, but consumers were not too aggressive after prices
crossed $1,200 level again, while holdings of gold in the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust <GLD.P> were unchanged at 1,316.481 tonnes, near late
June's record high. []
India, which accounts for more than 20 percent of global
demand, will celebrate several Hindu festivals in August and
September, before which gold should be in demand.
[]
Across the rest of the precious metals complex, silver
<XAG=> was bid lower at $17.92 an ounce, compared with $18.00
on Wednesday, while platinum <XPT=> was at $1,510.50 an ounce,
down from $1,523.50, and palladium <XPD=> was at $443.0,
compared with $446.00.
Prices at 3:29 p.m. EDT (1432 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1196.10 -2.80 -0.2% 9.1%
US silver <SIU0> 17.872 -0.128 0.0% 6.1%
US platinum <PLV0> 1516.40 -10.00 -0.7% 3.1%
US palladium <PAU0> 444.40 2.05 0.5% 8.7%
Gold <XAU=> 1196.75 -5.10 -0.4% 9.2%
Silver <XAG=> 17.90 -0.10 -0.6% 6.3%
Platinum <XPT=> 1511.50 -12.00 -1.0% 2.9%
Palladium <XPD=> 441.50 -4.50 -1.0% 8.9%
Gold Fix <XAUFIX=> 1193.50 -7.75 -0.6% 8.1%
Silver Fix <XAGFIX=> 18.00 35.00 194.4% 5.9%
Platinum Fix <XPTFIX=> 1528.00 2.00 0.1% 4.2%
Palladium Fix <XPDFIX=> 447.00 0.00 0.0% 11.2%
(Additional reporting by Humeyra Pamuk; Editing by Alden
Bentley)
