* Technical selling likely to prevail near-term
* SPDR Gold Trust holdings dip
* 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.
Spot gold <XAU=> was at $1,161.75 an ounce as of 0536 GMT, up
0.2 percent from late New York levels of $1,159.65 per 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. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
24-hr gold technical outlook: http://link.reuters.com/hym89m
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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.
Kamei said 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.
U.S. gold futures for August delivery <GCQ0> climbed 0.3
percent to $1,161 per ounce, after settling on COMEX at a
three-month low of $1,158 an ounce.
Gold priced in euros and in sterling stayed defensive a day
after falling to multi-month lows.
Euro-priced gold <XAUEUR=R> was at 893.15 euros after hitting
an almost three-month low of 891.25 euros on Tuesday.
Sterling-denominated gold <XAUGBP=R> briefly fell as low as
743.31 pounds per ounce, a new three-month low.
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.
[]
Among other precious metals, spot platinum <XPT=> was at
$1,537.50 per ounce, up 0.7 percent from late New York levels of
1,527.15. It stayed near a one-month high of $1,559.50 marked on
Tuesday amid caution over supply disruptions.
The National Union of Mineworkers (NUM) of South Africa said
on Tuesday that a strike planned for Monday at Impala Platinum
<IMPJ.J>, the world's No.2 platinum producer, will be delayed to
allow further negotiations between management and the union.
[]
PRICES
Precious metals prices at 0612 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1162.65 3.00 0.26 6.11
Spot Silver 17.63 0.02 0.11 4.75
Spot Platinum 1538.15 11.00 0.72 4.85
Spot Palladium 465.95 1.10 0.24 14.91
TOCOM Gold 3296 -30.00 -0.90 1.14 37097
TOCOM Platinum 4394 9.00 0.21 0.30 11512
TOCOM Silver 51 -0.80 -1.55 -1.93 340
TOCOM Palladium 1328 1.00 0.08 13.99 249
Euro/Dollar 1.3011
Dollar/Yen 87.8800
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda; Editing by Joseph Radford)
