* Heavy selling on U.S. futures market drags down prices
* SPDR gold ETF sees further 0.608 T outflow
* Platinum, palladium under pressure from growth jitters
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, July 16 (Reuters) - Gold slipped to a one-week low
on Friday as heavy fund selling of COMEX futures pushed it
through technical levels below $1,200 an ounce, with a retreat
in safe-haven buying leaving little support for prices.
A fresh outflow from the world's largest gold ETF has
undermined appetite for the precious metal, analysts said.
Spot gold <XAU=> slipped as low as $1,186.95 an ounce and
was bid at $1,187.70 an ounce at 1357 GMT, against $1,207.75
late in New York on Thursday. U.S. gold futures for August
delivery <GCQ0> fell $20.10 to $1,188.20.
COMEX floor trader Jonathan Jossen said there was heavy
selling of gold call options by a fund manager in early trade.
"There were sell-stops that set it off this morning," he
said. "There has been pressure in the market for weeks now.
Every time it gets up, the sellers come in."
Gold hit a record $1,264.90 an ounce in late June, after
worries over the sovereign debt of some euro zone economies
sparked buying of the metal as a haven from volatility in the
currency markets. As those fears recede, it has slipped back.
"The story of Spain, Portugal and Greece is now calming down
and people are taking their chips off the table, so we are
seeing gold under pressure," said Jeremy East, global head of
commodity derivatives trading at Standard Chartered.
"We are seeing (a return) to normality as people accept that
markets are calming down."
Earlier on Friday the premium investors demanded to hold
10-year Spanish government bonds rather than German benchmarks
fell following a successful auction the previous day. []
The dollar meanwhile held near two-month lows against the
euro, with the single currency benefiting from rising European
money market rates and a deteriorating outlook for the U.S.
economy. []
EQUITIES FALL
On the wider markets, U.S. stocks fell at the open after
Citigroup and Bank of America as well as bellwether GE posted
disappointing revenues, underscoring corporate America's
struggles against economic headwinds. []
European shares also fell more than 1 percent as financial
stocks gave up gains. []
Gold was also under pressure from a further 0.608-tonne
outflow from the world's largest gold exchange-traded fund, the
SPDR Gold Trust <GLD>, on Thursday, which analysts said points
to weaker investment demand for the metal. []
With jewellery demand also typically dropping over the quiet
summer months, softer ETF demand may mean little physical buying
of the metal will be seen.
"What would make gold vulnerable to further downside in
coming weeks is that it is the seasonally weakest period for
jewellery offtake, and (we have) high prices in Indian rupee
terms," said RBS analyst Daniel Major.
"Also, the investor side is not providing the positive
stimulus that it has over the last couple of months. Interest in
ETFs seems to have waned."
Silver slipped in line with gold, with spot silver <XAG=>
bid at $17.73 an ounce against $18.26.
Investment demand for physical silver has been firm, with
holdings of the largest silver ETF, New York's iShares Silver
Trust <SLV>, rising 33.5 tonnes so far this week.
Platinum <XPT=> was at $1,501 an ounce against $1,522.15,
while palladium <XPD=> was at $446.50 against $462.28.
Like other industrial metals, both are being weighed down by
concerns over economic growth.
(Additional reporting by Frank Tang and Maytaal Angel; editing
by James Jukwey and Sue Thomas)
