* Dollar extends gains after weak U.S. orders data
* Slower growth implied by orders hit oil, equity prices
* SPDR gold ETF posts fresh outflow
(Updates with New York prices, comment, adds IMF gold sale
news; reledes, changes byline and dateline)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, July 29 (Reuters) - Gold fell to a
two-week low in Europe and New York on Wednesday as rising risk
aversion boosted the dollar on the second day of gloomy U.S.
economic news which prompted losses across the metals spectrum
and took down oil and equities prices as well.
Spot gold <XAU=> was sharply lower at $928.10 an ounce in
late New York dealings versus $936.95 an ounce late Tuesday.
August gold <GCQ9> closed $11.90, or 1.27 percent, lower at
$927.20 an ounce on the COMEX division of the New York
Mercantile Exchange.
The COMEX gold range low at $925.20 dated back to July 15
and fell from a lower high at $940.90 an ounce.
Gold was brought down early after the U.S. durable goods
orders fell by more than forecast, driving the dollar up to
two-week highs against the euro, traders said.
The U.S. Commerce Department reported June durable goods
orders fell 2.5 percent, the largest drop since January, after
rising by a revised 1.3 percent in May, previously reported as
a 1.8 percent surge. []
The U.S. dollar climbed to a two-week high against the euro
as steep losses in Shanghai's stock market and the durable
goods report reignited the greenback's appeal as a safe-haven
currency. []
The value of dollar-denominated gold tends to decline in
overseas markets when the U.S. currency strengthens.
"I think (gold's decline) was mostly the dollar
appreciating quickly over the last two days. And weak oil
prices also helped remove some support for gold as well," CPM
Group's precious metals analyst Carlos Sanchez said.
Oil futures <CLc1> extended losses to fall about 6 percent,
or $3.88, settling at $63.35 a barrel after U.S. government
data showed a surprisingly large increase in crude inventories
last week. []
VTB Capital analyst Andrey Kryuchenkov said the weak
durable goods numbers had depressed stock markets and pushed
the dollar higher. "(Gold) trades on the dollar and equities,"
he said.
U.S. stocks fell on the durable goods data and investors
fretted about China's equities slide. []
Chinese stocks <> dropped by the most in eight months
on Wednesday, ending a five-day rally, on concerns banks could
restrict lending. []
"There will be a moment of volatility because the end of
the week sees more data coming out," he said. "I think we can
hold on $925 -- there is pretty good support there -- and I
think we will not get lower than $920," the analyst added.
Gold's slide below $940 an ounce, a level that had been
holding for over a week, sparked some technical selling by
triggering automatic sell orders, traders said.
Late in the session, there was little reaction to a
development in the International Monetary Fund's planned sale
of gold.
A senior IMF official said a planned sale of 400 tonnes of
IMF gold would take place within a new central bank gold sales
agreement now being negotiated. []
The IMF has provisionally agreed to sell the gold to raise
resources for increased lending to poor countries. A final
decision by all 186 IMF member countries on the sales is
expected at IMF meetings in Istanbul in October and requires
the support of 85 percent of the membership.
"I doubt gold moved on that, because some of it was stated
when the news first came out in April. Once they release final
details of IMF pact for central back gold selling limits, it
should push prices somewhat," said CPM Group's Sanchez.
Regardless of the IMF's final announcement, he added,
central banks will sell much less than they have been over the
last few years.
SLOW DEMAND
Investment demand for gold remained lackluster, with a
further 3.36-tonne outflow from the world's largest
bullion-backed exchange-traded fund, the SPDR Gold Trust,
adding to a recent retreat in ETF holdings. []
Among other precious metals, platinum <XPT=> fell more than
2 percent to a low of $1,162, and was later at $1,170.50 an
ounce against $1,193. Palladium <XPD=> at $251 was lower than
$257 in late Tuesday trade.
Silver <XAG=> was at $13.25 an ounce, down from $13.70.
(Editing by Christian Wiessner)
