* 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
By Frank Tang and Clara Denina
NEW YORK/LONDON, May 27 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)