* Technical selling likely to prevail near-term
* SPDR Gold Trust dips
* Coming up: U.S. Beige Book at 1800 GMT
By Chikako Mogi
TOKYO, July 28 (Reuters) - Gold steadied on Wednesday after
falling 2 percent to a near three-month low the day before, when
a bigger-than-expected drop in U.S. consumer confidence and an
option expiry prompted heavy selling.
The position adjustment related to expiring COMEX August gold
options pushed prices close to a key technical support, where the
market was likely to hover before finding fresh clues for
direction, traders said.
With increasing market scrutiny on nations' fiscal health and
doubts over the effectiveness of ultra-low monetary policies in
supporting the economy, governments around the world are facing
difficulties finding fresh ways to stimulate the economy and beat
deflationary pressures, said Koichiro Kamei, managing director at
Tokyo-based researcher Market Strategy Institute Inc.
Expectations for rising inflation as a result of stimulative
policies or concerns about a further deterioration in fiscal
deficits as a result of more government spending have largely
supported gold prices, which hit a record high in late June.
"Reasons supporting investor buying of gold have weakened
recently, and options-related technical selling could undermine
sentiment in the short-term as investors seek fresh clues for
direction," Kamei said.
He added that the market was close to the support of its
200-day moving average, which on Wednesday stood at around
$1,148.
Key events closely watched by investors include the U.S.
Beige Book report due later in the day, as well as U.S. monthly
jobs data due next week and the U.S. Federal Reserve policy
decision next month, Kamei said.
Spot gold <XAU=> was at $1,163.45 an ounce as of 0238 GMT, up
0.3 percent from late New York levels of $1,159.65 per ounce.
Spot gold fell to a low of $1,157.65 an ounce on Tuesday, the
cheapest price since May 5. Bullion also posted its biggest
one-day decline since July 1.
U.S. gold futures for August delivery <GCQ0> rose 4 percent
to $1,162.60 per ounce, after settling on COMEX at a three-month
low of $1,158.00 an ounce.
Spot gold could consolidate above $1,157.65 per ounce for a
trading session before falling towards $1,140, as a rebound is
expected after the previous session's sharp fall, according to
Wang Tao, a Reuters market analyst for commodities and energy
technicals. []
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24-hr gold technical outlook: http://link.reuters.com/hym89m
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Gold priced in euros and sterling recovered from multi-month
lows hit on Tuesday.
Euro-priced gold <XAUEUR=R> was at 895.77 euros an ounce,
while sterling-denominated bullion <XAUGBP=R> stood at 746.92
pounds per ounce.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P> said its holdings fell to 1,300.829 tonnes by
July 27, down 0.913 tonnes from the previous business day.
[]
PRICES
Precious metals prices at 0249 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1163.75 4.10 0.35 6.21
Spot Silver 17.62 0.01 0.06 4.69
Spot Platinum 1534.50 7.35 0.48 4.60
Spot Palladium 467.00 2.15 0.46 15.17
TOCOM Gold 3293 -33.00 -0.99 1.04 26445
TOCOM Platinum 4368 -17.00 -0.39 -0.30 6983
TOCOM Silver 51 -1.00 -1.94 -2.32 237
TOCOM Palladium 1325 -2.00 -0.15 13.73 163
Euro/Dollar 1.2990
Dollar/Yen 87.7200
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Chikako Mogi; Editing by Joseph Radford)
