* Dollar hits two-month low after U.S. Philly Fed data
* Equities, industrial commods slide after report
* Gold expected to take support from technical factors
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, July 15 (Reuters) - Gold surrendered gains on
Thursday, caught up in selling of other assets as equities slid
in the wake of soft U.S. economic data, though losses were
limited by ongoing interest in the metal as a haven from risk.
Spot gold <XAU=> was bid at $1,207.35 an ounce at 1431 GMT
against $1,207.50 late in New York on Wednesday, having earlier
risen as high as $1,216.95. U.S. gold futures for August
delivery <GCQ0> eased 50 cents to $1,206.50.
Stock markets weakened in Europe and the United States after
a lower-than-expected reading from the Philadelphia Federal
Reserve's index of business conditions in the U.S. Mid-Atlantic
region pointed to sluggish U.S. growth.
While in the longer term concerns over the economy tend to
support gold, in the short run the metal is often caught up in
selling of equities as investors liquidate the metal to cover
losses in other markets. Gold remains in a narrow range.
"Bargain hunters want to buy it around $1,200, and (at)
$1,217, profit takers are all lined up," said Afshin Nabavi,
head of trading at MKS Finance.
"Overall a break above $1,225 should trigger more interest
from the buyers who are currently on the sidelines. On the
downside, $1,200 to $1,185 should bring in some physical related
buying."
On the currency markets, the euro extended gains against the
dollar, nearing $1.29 for the first time in two months, after
data showed the Philadelphia Federal Reserve's business
conditions index fell in July. []
Among other commodities, oil futures fell more than $1 on
Thursday as disappointing economic data pushed the stock market
lower, while base metals slipped. [] []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the relative price performance of key
commodities so far this year, click on:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
CREEP HIGHER
From a technical perspective, gold is poised to creep higher
after its sharp correction from record highs at $1,264.90 an
ounce in late June.
Chart support combined with re-emerging physical demand
prevented the metal from falling substantially below $1,200 an
ounce, and it has successfully held above that level for the
last two sessions.
"With daily momentum pointed higher and the market pulling
away above trendline support at $1,182, we are maintaining our
near-term focus higher towards $1,225/27," technical analysts at
Barclays Capital said in a note.
"Retracement resistance beyond $1,227 is at $1,235, and it
would take a recovery above this latter level to suggest that
gold is primed to post new 2010 highs," they added.
Among other precious metals, silver <XAG=> was bid at $18.23
an ounce against $18.24, steadying in line with gold. Platinum
<XPT=> was at $1,521.50 an ounce against $1,519.50, while
palladium <XPD=> was at $465.50 against $464.50.
"Platinum and palladium, which are predominantly used for
the production of autocatalyts, are currently facing some
pressure," said Commerzbank in a note.
"The declining global demand for vehicles might have
contributed to this trend. Car sales in Europe, for instance,
fell by 6.2 percent in June compared to last year," it added.
"The biggest growth market China also registerd a slowdown
of growth dynamics. In June, sales figures for cars grew at the
slowest rate for 15 months."
(Editing by James Jukwey)
