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Spot gold falls on revived risk appetite after failed Turkey coup

Spot gold falls on revived risk appetite

Spot gold fell on Monday as European equities rose after investor jitters calmed following a failed coup attempt in Turkey.

Spot gold fell earlier to a session low of $1,323.70 an ounce and was down 0.6 percent at $1,329.40. Bullion fell over 2 percent last week, its first weekly decline in seven weeks, as investors piled cash into riskier assets. Gold futures settled at $1329.30 per ounce.

U.S. gold was up 0.17 percent at $1,329.60 an ounce. Turkey widened a crackdown on suspected supporters of the failed military coup, taking the number of people rounded up in the armed forces and judiciary to 6,000. The government said it was in control of the country and economy.

Gold had turned higher immediately after news of Turkey's coup on Friday, as demand for assets perceived as safe, such as bullion and bonds, briefly spiked.

"Gold always shows to be a safe harbor during political instability or when wider markets are in turmoil," ActivTrades chief analyst Carlo Alberto De Case said.

"After the metal broke below support at $1,340 an ounce, a push lower is possible, as the situation in Turkey 'stabilized' and there are no new headlines on the Brexit saga."

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Gold gained $100 in the two weeks following Britain's vote to leave the European Union, as worried investors started putting their cash into safe-haven assets, before falling back.

The dollar fell 0.08 percent against a basket of six currencies, while a giant takeover bid in the tech sector and the promise of central bank stimulus lent support to equities.

"People have formed expectations that central banks worldwide have to include more stimulus packages in their monetary policies, leading to risk asset appreciation," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

Money managers and speculators cut their record bullish bets for the first time in five weeks in the week to July 12, U.S. Commodity Futures Trading Commission data showed.

Adding further pressure on bullion was positive U.S. retail sales data, which rose more than expected in June.

St. Louis Fed President James Bullard said on Friday there are "upside" risks to his view that the U.S. central bank should raise interest rates just once this year and remain on hold in 2017 and 2018.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

Among other precious metals, spot silver was down 0.69 percent at $20.06 an ounce.

Spot platinum was up 0.94 percent at $1,095.75 an ounce, while spot palladium fell 0.06 percent to $646.10 an ounce.