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PRECIOUS-Gold edges down as calm returns after Brexit shock

Published 30/06/2016, 05:31 pm
© Reuters. PRECIOUS-Gold edges down as calm returns after Brexit shock
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* Credit Suisse (SIX:CSGN), J.P.Morgan, ANZ ups gold, silver price forecasts

* Silver hovers near 1-1/2-year high touched on Wednesday (Adds comment, updates prices)

By Sethuraman N R

BENGALURU, June 30 (Reuters) - Gold fell on Thursday after rising as much as 1 percent during the previous session, with safe-haven demand easing as the shock of Britain's decision to leave the European Union began to fade.

Asian stocks rose on Thursday, tracking an overnight rally on Wall Street, while the dollar remained steady against a basket of currencies as global markets regained a semblance of calm. MKTS/GLOB USD/

Spot gold XAU= had fallen 0.4 percent to $1,313.36 an ounce by 0714 GMT. It closed about 0.5-percent higher on Wednesday, rising for three out of four sessions.

U.S. gold GCcv1 was down 0.8 percent at $1,316.20.

"It seems that the market has now turned away from the Brexit saga for the moment, given that there are no major developments in terms of what it (Britain) plans to do next," said Vyanne Lai, analyst, National Australia Bank.

"The general feeling is that the U.S. Federal Reserve might not be in a rush to increase interest rates in the coming months."

Credit Suisse on Wednesday raised its short-term and long-term price forecasts for gold and silver, citing prolonged macro and political uncertainty following the Brexit vote. forecast the gold price to increase through 2016 and believe the $1,500/oz mark could be tested by late 2016 or early 2017 as the macro implications of the Brexit vote are clarified, and the Nov. 8 U.S. election weighs on sentiment," the bank said.

J.P.Morgan raised its 2016 and 2017 gold and silver price forecasts, while lifting its bullion forecast for the second half of the year by 11 percent to $1,365 per ounce. too raised its short term target for gold to $1,375 an ounce, with further upside expected in 2017.

Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.28 percent to 950.05 tonnes on Wednesday, the highest since July 2013. XAG= , which climbed around 3 percent on Wednesday, was up 0.3 percent at $18.33 an ounce, near its 1-1/2-year highs touched in the prior session.

"We expect gains to continue as silver may be attracting coin and bar demand from price-sensitive gold buyers," HSBC analyst James Steel said in a note on Wednesday.

J.P.Morgan, which forecast silver prices to average $17.61 per ounce in H2 2016, said that silver would benefit from an improving macro environment for precious metals ownership.

Among other precious metals, platinum XPT= fell 0.4 pct to $999 an ounce and palladium XPD= was up 0.3 percent at $587.26.

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