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Gold slips as investors cash in post-Brexit vote gains

Gold
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Gold fell more than 1 percent on Tuesday as buyers cashed in gains from the biggest two-day rally in the metal since late 2008, made in the wake of Britain's shock vote to leave the European Union last week.

The metal jumped to its highest in more than two years at $1,358.20 an ounce on Friday after the UK referendum vote, and to more than three-year highs in euro and sterling terms. It quickly retreated from that peak, however.

Spot gold was down 0.92 percent at $1,312.21 an ounce on Tuesday, off an earlier low of $1,305.23. U.S. gold futures for August delivery settled at $1,317.90, down $6.80.

World stocks rose after three days of decline and sterling and the euro strengthened on Tuesday as investors snapped up assets hurt by some of the biggest falls since the 2008 collapse of Lehman Brothers.

"Gold is taking a well-deserved breather," Saxo Bank's head of commodity strategy said. "Risk appetite is returning for now and with that, worries about the very rapid build-up of long positions leading up to Brexit."

"I see the risk limited to around $1,275, and would be worried if it breaks below $1,250," he said. European leaders told Britain on Tuesday to act quickly to resolve the political and economic chaos unleashed by its vote to leave the European Union, a move the IMF said could put pressure on global growth.

Among currencies, sterling rose from 31-year lows against the dollar while the euro climbed 0.57 percent against the U.S. currency.

Investors also sought lower-rated euro zone bonds on Tuesday, venturing from the safety of German benchmarks as they bet on action from the European Central Bank to shore up the bloc after the Brexit vote.

"If we have news that there is stress in the financial system, which might make people think we are moving into a Lehman-like moment, that could trigger higher gold prices," Julius Baer analyst Carsten Menke said.

"But as long as we do not see these indicators of systemic stress, gold should stay rather rangebound at these higher levels."

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, climbed by another 13 tonnes on Monday to 947.38 tonnes, the highest since July 2013.

Among other precious metals, spot silver was up 0.5 percent at $17.81 an ounce, spot platinum was down 0.23 percent at $971.75 and spot palladium was 2.43 percent higher at $568.47.