Top Stories
Top Stories
Wires

PRECIOUS-Gold steadies as stocks surge; growth risks, rate cut bets lend support

Diptendu Lahiri

support@

* U.S. stock indexes close at record high

* Gold hits $1,435.99/oz, highest since June 25

* Palladium hits more than three-month peak

* SPDR Gold holdings fell 0.2% on Tuesday (Updates prices)

July 3 (Reuters) - Gold steadied on Wednesday, paring earlier gains as a rally in equities reduced the attraction of the non-yielding metal, while global growth concerns and prospects for dovish monetary policy kept bullion supported.

Spot gold was steady at $1,416.98 per ounce as of 1:33 p.m. EDT (1733 GMT), after earlier touching $1,435.99, its highest level since June 25.

U.S. gold futures settled about 1% higher at $1,420.90 per ounce.

Wall Street stocks rose on Wednesday, with each of the major indexes closing at a record high, as expectations grew that the U.S. Federal Reserve would take a more dovish turn as a raft of data provided more evidence of a slowing economy.

The yellow metal reversed course briefly after U.S. markets opened, but later steadied.

"Gold has had quite a strong performance in the last two days and this fall is just an ebb in the flow," said Daniel Ghali, commodity strategist at TD Securities.

The case for gold - which last week hit a six-year high at $1,438.63 per ounce - is still positive, analysts said, driven by a dovish outlook from major central banks and an escalation of tensions between the United States and Iran.

European Union leaders nominated IMF chief Christine Lagarde as Mario Draghi's replacement at the helm of the European Central Bank after marathon talks that have exposed deep divisions in the bloc.

"German 10-year Bund yields were at record lows and the U.S. benchmark yields are also falling on government monetary policy, giving the equity markets a boost and taking away investor interest from gold," said Jim Wyckoff, senior analyst at Kitco.com.

U.S. Treasury yields fell on Wednesday with yields on U.S. benchmark 10-year Treasury notes hitting their lowest in over 2-1/2 years as euro zone yields tumbled on record lows on bets the European Central Bank's next chief would stay a dovish course to help the euro zone economy.

Government yields around the world were also pressured after Bank of England Governor Mark Carney flagged uncertainties over Brexit and trade conflicts that prompted speculation the central bank may lower interest rates.

On the technical front, gold will find support at Tuesday's close, around $1,418, and could find resistance around $1,440, TD Securities' Ghali added.

Holdings of the SPDR Gold Trust have gained more than 5% over the past one month.

Silver was slightly lower at $15.30 per ounce. The precious metal is unlikely to follow gold's upward trajectory, analysts said.

Platinum climbed 1.3% to $838.50 per ounce, while palladium rose 0.8% to $1,570.27, hovering near a three-month peak of $1,572.50 touched earlier in the session. (Reporting by Diptendu Lahiri in Bengaluru; editing by G Crosse)