Gold slips as Brexit tensions ease and stocks rally

London (July 12)   Gold edged lower on Tuesday as global equities rallied on easing political uncertainty in Britain and hopes for more economic stimulus measures, which in
turn curbed demand for assets perceived as a haven.

Spot gold was down 0.2 percent at $1,352.06 an ounce by 0940 GMT after falling nearly one percent on Monday, which was its biggest decline in almost two weeks,
    U.S. gold was down 0.1 percent at $1,355.30 an ounce.

"Tensions in Britain are easing for now, as the country will soon have a new prime minister," ActivTrades chief analyst Carlo Alberto de Casa said.
    "With the British pound gaining some ground, demand for gold
and other safe havens is also decreasing," De Casa said, adding
that the next support level for gold was around $1,340 an ounce.
    Gold has gained about $100 an ounce since the United Kingdom
voted to leave the European Union, as worried investors piled
their cash into safe-haven assets.
    However, Asian stocks hit a 2-1/2-month peak on Tuesday and
European shares were on track for a fourth straight day of gains
on hopes of more stimulus from global policymakers.
    Japan's ruling coalition fanned expectations of more fiscal
stimulus, while the Bank of England could cut rates as soon as
Thursday following its monthly policy meeting.
    Markets were also assessing whether the latest U.S. jobs
data has boosted the prospects for an interest rate increase by
the U.S. Federal Reserve.
    Gold came under pressure after strong U.S. non-farm payrolls
data on Friday boosted some expectations for a U.S. rate rise.
    Kansas City Federal Reserve President Esther George said on
Monday that U.S. interest rates were too low and signalled she
could be ready to resume her push within the Fed's rate-setting
committee for rate increases.
    Lower rates tend to boost gold prices because they cut the
opportunity cost of holding non-yielding bullion while weighing
on the dollar, in which it the metal priced.
    "Not too long ago, gold prices would have withered on
prospects of higher stock prices, but not this time around;
investors are thinking that the spate of monetary easing is
likely to persist for some time to come, keeping both gold and
equities fairly well supported," INTL FCStone said in a note.
    The European Central Bank will not ease monetary policy any
further at its meeting next week, according to an overwhelming
majority of respondents in a Reuters poll of euro money market
traders.
    Silver was up 0.6 pct at $20.41 an ounce.
    Platinum, which rose to a 13-month high of $1,104.10
on Monday, fell for the first time in two weeks, down 0.1
percent at $1,099 an ounce.

Source: Reuters