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PRECIOUS-Gold slips as U.S. data, stimulus hopes boost equities

Published 12/07/2016, 04:37 am
© Reuters.  PRECIOUS-Gold slips as U.S. data, stimulus hopes boost equities
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* Stock markets bounce on jobs data, stimulus bets

* Comex gold, silver net longs rise to record highs

* Platinum rises to 13-month high

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices, adds comment, second byline, NEW YORK dateline, pvs LONDON)

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, July 11 (Reuters) - Gold fell on Monday as stock markets rallied on the back of Friday's stronger-than-expected U.S. jobs data and the prospect of more monetary stimulus from central banks, while the dollar rose against a basket of currencies.

Simmering concerns over the prospect of Britain leaving the European Union kept gold underpinned, however, keeping prices within $20 of last week's more than two-year high.

Spot gold XAU= was down 0.8 percent at $1,355.50 per ounce by 2:31 p.m. EDT (1831 GMT), having touched its highest since March 2014 last week at $1,374.91 an ounce.

U.S. gold futures GCv1 for August delivery settled down 0.1 percent at $1,356.6 per ounce.

"New highs in U.S. bonds and the stronger than expected jobs report have raised the odds of a rate hike later this year," said Saxo Bank head of commodities research Ole Hansen.

"But the strong response to the weakness post non-farm payrolls on Friday was a clear signal that buyers are still lurking around, waiting for the opportunity to pick gold up cheaper."

The S&P 500 touched a record intraday high and the dollar continued to take support from the U.S. jobs report on Monday, which saw investors price in the chance of a Federal Reserve interest rate increase before the end of the year. MKTS/GLOB 24 percent chance of an increase by December is now being priced in, the CME FedWatch tool showed, though the overall view is still that interest rates will remain unchanged.

Kansas City Federal Reserve President Esther George said U.S. interest rates are too low and signaled she could be ready to restart her push for rate hikes within the Fed's rate-setting committee. is highly sensitive to U.S. interest rates, increases in which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar.

"This is more of a risk-on day. The Brexit issue seems to be downplayed a little bit. A new prime minister's been selected, so things are a little bit better," said Bill O'Neill, co-founder of LOGIC Advisors.

U.S. government data showed late Friday that hedge funds and money managers again raised their net long positions in COMEX gold and silver contracts to record highs in the week to July 5, after Britons voted to leave the EU. XAG= was up 0.09 pct at $20.28 an ounce. Platinum XPT= rose as much as 0.7 percent to a 13-month high at $1,103.80 an ounce, while palladium XPD= climbed 1.6 percent to a two-month high of $625.

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http://reut.rs/1WAiOSC

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