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PRECIOUS-Gold falls more than 1 pct as Brexit campaign seen losing steam

Published 20/06/2016, 05:33 pm
© Reuters.  PRECIOUS-Gold falls more than 1 pct as Brexit campaign seen losing steam
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(Recasts, updates prices)

* Gold falls after biggest one-day gain in two weeks

* Polls show 'Remain' camp regaining momentum in Brexit vote

By Vijaykumar Vedala

BENGALURU, June 20 (Reuters) - Gold eased more than 1 percent on Monday, extending its slide from a near 2-year peak hit last week, as polls ahead of a referendum showed Britain could opt to remain in the European Union.

Three opinion polls ahead of Thursday's vote showed the 'Remain' camp recovering some momentum, although the overall picture remained one of an evenly split electorate. concerns over 'Brexit' sparked a rally in Asian stocks and the sterling, and increased investor appetite for risk assets, hurting gold. MKTS/GLOB USD/

A vote by Britain to leave the 28-member EU, dubbed "Brexit," could tip Europe back into recession, putting more pressure on the global economy and thus boosting the safe haven appeal of bullion.

Spot gold XAU= dropped 1.1 percent to $1,283.96 an ounce at 0701 GMT, after touching a low of $1,280.15 earlier in the session.

Bullion closed 1.5 percent higher on Friday to post its biggest single day gain since June 3. The precious metal hit its highest since Aug. 2014 in intraday trade on Thursday.

U.S. gold GCcv1 slid 0.6 percent to $1,287.30

"We have to suspect that markets will remain quite choppy in the lead up to the British vote and in gold's case, the path of least resistance will likely be higher," INTL FCStone analyst Edward Meir said in a note.

"There could be a "post-vote" let down on Friday and heading into the following week, especially if investors realise that a 'Leave' vote is not going to have the Armageddon-like ending many are fearing."

There was however some optimism for bullion as holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.59 percent to 907.88 tonnes on Friday, the highest since September 2013. GOL/ETF

Hedge funds and money managers took their bullish stance in gold to the highest in nearly five years in the week to June 14, U.S. government data showed on Friday. best case scenario for gold in the coming few days is that it stabilises at the current level just ahead of the $1,300 resistance level. But there could be a bit of pull-back to about $1,250-$1,260," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

"By the end of June, I think $1,300-$1,400 should be relatively a reasonable price for gold."

Among other precious metals, silver XAG= fell 0.7 percent to $17.35 and platinum XPT= was down 0.1 percent to $966.49.

Palladium XPD= , which touched its lowest since May 25 on Friday, climbed 0.8 percent to hit $535.72.

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