PRECIOUS-Gold slips 2 pct on S&P rally, technicals; platinum falls
* Technical selloff driven by breakout from pennant pattern
* U.S. durable goods bright, consumer confidence rose
* Platinum off on strike mediation talks
* Coming up: U.S. mortgage market index Weds (Adds comment, second byline, dateline, updates market activities)
By Frank Tang and Clara Denina
NEW YORK/LONDON, May 27 (Reuters) - Gold fell 2 percent on Tuesday, the most in one day since December, as an intraday record high of the S&P 500 equities index and economic optimism triggered a heavy bout of technical selling.
The S&P reached a record 1,911.61, boosted by merger activity and expectations of rate cuts by the European Central Bank that stoked investor appetite for equities. Also, orders for U.S.-made durable goods unexpectedly rose in April and consumer confidence perked up in May, supporting views of a rebound in economic growth.
Technical analysts also cited gold's recent pennant chart formation, also known as a flag because of its triangular shape, which represents a brief consolidation with narrowing price ranges before the previous market move is resumed.
Prior to its consolidation period, gold had fallen more than $100, or about 10 percent, after rallying to a near nine-month high at $1,390 in mid March.
"Gold managed to break out of a triangle formation to the downside, which is a bearish sign and should provoke follow-up selling," said Carsten Fritsch, analyst at Commerzbank.
Spot gold fell 2 percent to its lowest since Feb. 7 at $1,264.05 an ounce in earlier trade and was down 2 percent at $1,266.75 an ounce by 3:02 p.m. EDT (1902 GMT), marking its worst daily loss since Dec. 19.
U.S. COMEX gold futures for June delivery settled down $26.20 at $1,265.50 an ounce.
Trading volume was nearly 330,000 lots, almost a one-year high and more than double its 30-day average at 150,162, preliminary Reuters data showed.
Tuesday's turnover included holiday trading from Monday, when the U.S. market was closed for the Memorial Day holiday.
Also weighing on prices was news that China's gold imports from main conduit Hong Kong fell to a 14-month low of 67.040 tonnes in April, from 85.128 tonnes in March.
Among other precious metals, platinum fell 1 percent to $1,456.80 an ounce after new South African mining minister Ngoako Ramatlhodi pledged to mediate in a mines strike now in its fifth month.
Palladium rose 0.2 percent to $831.25 an ounce and silver fell 1.8 percent to $19.06 an ounce. 3:02 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL US Gold JUN 1265.50 -26.20 -2.0 1264.30 1294.80 231,787 US Silver MAY 19.039 -0.349 -1.8 19.075 19.395 46 US Plat JUL 1462.30 -10.50 -0.7 1461.10 1483.50 10,684 US Pall JUN 830.65 -0.80 -0.1 827.00 835.70 12,869 Gold 1266.75 -25.99 -2.0 1264.86 1293.39 Silver 19.060 -0.340 -1.8 19.060 19.430 Platinum 1456.80 -14.70 -1.0 1461.50 1477.75 Palladium 831.25 1.85 0.2 828.50 833.75 TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 326,914 150,162 182,829 17.44 0.06 US Silver 59,422 48,024 58,338 24.94 -0.86 US Platinum 11,190 17,961 12,577 17.99 0.66 US Palladium 24,181 6,653 5,795 28.17 0.38 (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Susan Thomas, David Evans and Steve Orlofsky)
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