PRECIOUS-Gold slips more than 1 pct as Brexit campaign loses momentum

Published 2016-06-20, 03:00 p/m
© Reuters.  PRECIOUS-Gold slips more than 1 pct as Brexit campaign loses momentum
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* Gold falls after biggest one-day gain in two weeks
* Polls show 'Remain' regaining momentum in Brexit vote
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC

(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, June 20 (Reuters) - Gold fell on Monday
after polls showed the campaign for Britain to remain in the
European Union regaining some momentum, sharpening appetite for
assets seen as higher risk and sparking a sharp rally in stocks.
Speculation that British voters could opt to leave the
trading bloc in a referendum on Thursday helped push gold to its
highest in nearly two years last week, and to three-year peaks
in euro and sterling terms.
However, three opinion polls ahead of the vote showed the
"Remain" camp recovering some momentum, although the overall
picture was still one of an evenly split electorate. That helped
pull gold back from its highs.
Spot gold XAU= was down 0.8 percent at $1,288.50 an ounce
at 2:46 p.m. EDT (1846 GMT), off an earlier low of $1,277.34 an
ounce, while U.S. gold futures GCv1 for August delivery
settled down 0.2 percent at $1,292.10 an ounce.
"This is all related to Brexit, with a few talking of the UK
not leaving," said Afshin Nabavi, head of trading at MKS in
Switzerland.
Two weekend polls showed "In" retaking the lead and another
showed the "Out" campaign's lead narrowing. Bookmakers' odds
have shown those wishing to stay in the EU ahead and Betfair put
the implied probability of a vote to "Remain" at 72 percent on
Monday, up from 60-67 percent on Friday.
Global stocks rallied and sterling strengthened broadly.
MKTS/GLOB
"CPM expects gold prices to come off after the British
referendum Thursday, regardless of the outcome," said CPM Group
in a note.
"It might come off more on a Remain vote and less on an Exit
vote, but we expect it will come off sharply."
As of June 14, hedge funds and money managers held the
biggest net long position in COMEX gold in nearly five years.

"We had a few days at the beginning of last week when the
odds of a 'Leave' vote were getting higher than a 'Remain' vote,
which prompted a sharp rally," Capital Economics analyst Simona
Gambarini said.
"Now we're in a situation where we're getting a little bit
more even, so you see a bit of steam coming out of the gold
price."
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares GLD , rose to the highest since
September 2013 on Friday. GOL/ETF
Silver XAG= was down 0.1 percent at $17.46 an ounce and
platinum XPT= was 1.8 percent higher at $984.86. Palladium
XPD= , which touched its lowest since May 25 on Friday, was up
2.5 percent at $544.76 an ounce.

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