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PRECIOUS-Gold slips on firmer equities; central banks in focus

Published 25/07/2016, 05:14 pm
© Reuters.  PRECIOUS-Gold slips on firmer equities; central banks in focus
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* Investors wait for Fed meet outcome on Wed, BOJ on Friday

* Palladium hovers below near 9-month highs touched Friday (updates prices)

By Vijaykumar Vedala

BENGALURU, July 25 (Reuters) - Gold extended losses on Monday from the previous session as Asian stocks were at near nine-month highs on increasing risk appetite and ahead of central bank meetings in the United States and Japan this week.

Asian shares rose on Monday as worries over the impact of Britain's Brexit vote eased amid efforts to maintain growth, while the dollar was buoyed by a run of solid U.S. economic data. MKTS/GLOB USD/ gold XAU= was down 0.4 percent at $1,316.16 an ounce at 0703 GMT. Bullion fell 0.7 percent on Friday, declining for a second successive week. U.S. gold GCcv1 was down 0.5 percent at $1,316.20 an ounce.

"We could see some falling of gold prices with markets thinking things are not as bad as expected post-Brexit and the good performance of key U.S. economic indicators," said Jiang Shu, chief analyst at Shandong Gold Group.

The Bank of Japan and the U.S. Federal Reserve will likely come up with some fairly positive comment on the economic performance, along with other central banks, to cool down the pessimistic emotions of global financial market, Shu said.

Central banks from Washington to Tokyo take centre stage this week, although policymakers are likely to remain cautious as they wait for the dust to settle from Britain's shock vote to leave the EU. see tentative trade this week within the precious complex with both the BOJ and Fed meeting," MKS Group trader Sam Laughlin said in a note.

"Price action will likely be skewed to the downside and we expect to test the post-Brexit low around $1,305 and below this $1,300 should global equities continue their upward trajectory."

Spot gold may break support at $1,313 per ounce and fall to the next support $1,298, as its bounce from a July 21 low of $1,310.56 may have ended, Reuters technical analyst Wang Tao said. funds and money managers continued to pile on bullish silver bets in the week to July, data showed on Friday. other precious metals, silver XAG= , which fell about 3 percent last week, was down 0.7 percent to $19.48.

Palladium XPD= , which touched a near-nine month high on Friday, was down 0.3 percent at $678.20. It registered its fifth weekly gain last week, after rising 5 percent for the week.

Platinum XPT= was down 0.6 percent $1,070.99 an ounce.

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