* Gold falls below $1,200, nears lowest since end-May
* For the technicals on gold, click []
* Pick-up in physical buying also supports bullion
(Updates prices and comments)
By Amanda Cooper and Humeyra Pamuk
LONDON, July 8 (Reuters) - Gold fell below $1,200 an ounce
on Thursday, nearing recent six-week lows, as growing optimism
over the global economy limited investor interest in perceived
safe-haven assets, although consumers helped contain losses.
Global equities <.MIWD00000PUS> rose to their highest in
seven trading sessions, while Wall Street climbed after several
top U.S. retail chains reported stronger-than-expected sales in
June, which helped reinforce confidence in the upcoming
quarterly reporting season. []
Spot gold <XAU=> stood at $1,191.35 an ounce by 1514 GMT,
compared with $1,201.85 late in New York on Wednesday, when it
hit a low of $1,185.05, its lowest since May 25 and around 6
percent below late June's record high.
U.S. gold futures for August delivery <GCQ0> dipped $8.90 to
$1,190 an ounce.
"The risk appetite is increasing again," said Jesper
Dannesboe, senior commodity strategist at Societe Generale.
"Stocks, base metals are all rallying across the board."
"Although it's been very profitable to buy gold from the
dips, so I wouldn't dare say don't do it anymore," he added.
Gold prices have hit lifetime highs above $1,260 an ounce,
fuelled by concern the European debt crisis would spread and the
U.S. economy was slowing.
In the euro zone, European Central Bank President
Jean-Claude Trichet said the ECB was expecting the euro zone's
recovery to be moderate and uneven after the bloc's interest
rates were held at a record low 1.0 percent. []
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CALM RETURNS
A lot of nervousness in the market had also stemmed from
concern that debt-laden nations such as Portugal, Spain or
Greece would be unable to access funding.
But a series of solid government bond auctions from both
peripheral and core euro zone states, and the smooth repayment
of nearly half a trillion euros' worth of emergency one-year
loans by banks to the ECB last week went a long way towards
soothing that concern.
"I just feel that we could be near the top of the range for
gold," said Credit Agricole analyst Robin Bhar. "Maybe there are
factors that will help support it, but I don't think you've got
the fear factor any more."
Helping to keep gold relatively stable at the lower levels
was a pick-up in consumer activity in key buying regions in line
with the pullback in the price.
The physical sector saw buying interest from Indonesia and
Thailand, but consumers were not too aggressive after prices
crossed $1,200 level again, while holdings of gold in the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust <GLD.P> were unchanged at 1,316.481 tonnes, near late
June's record high. []
"There's still some buying but I guess most people are now
waiting for delivery. Physical buying is still there and my
premiums have gone up to 80 cents," said a dealer in Singapore.
Jewellers in India have been stocking up ahead of religious
festivals, and other physical buyers in Asia snapped up bullion
after prices fell. [] []
India, which accounts for more than 20 percent of global
demand, will celebrate the Hindu festival of Raksha Bandhan on
Aug 24, Janmasthami and Ganesh Chaturthi in September.
[]
Across the rest of the precious metals complex, silver was
bid at $17.75 an ounce, compared with $18.00 on Wednesday, while
platinum <XPT=> was at $1,504 an ounce, versus $1,523.50 and
palladium <XPD=> was at $434.08, compared with $446.00.
(Additional reporting by Humeyra Pamuk, Editing by Veronica
Brown)
