PRECIOUS-Huge sell order pushes gold to six-week low

    * Spot gold hits lowest since May 17
    * COMEX gold drops $18 within 1 minute in early trade
    * GRAPHIC-2017 asset returns:

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, June 26 (Reuters) - Gold tumbled to its
lowest price in nearly six weeks as a large sell order hit
sentiment on Monday, though losses were limited by political
uncertainty around the world.
    Spot gold        was down 0.9 percent at $1,244.82 an ounce
by 2:22 p.m. EDT (1822 GMT), having dropped as far as $1,236.46,
its lowest since May 17 and just above the 200-day moving
    U.S. gold futures for August delivery         settled down
0.8 percent at $1,246.40, after making an $18 drop in heavy
volume to $1,236.50 and then rebounding by $10, all within 60
seconds around 4 a.m. EDT (0800 GMT).
    The sale of 18,500 lots of gold, totaling 1.85 million
ounces, and 5,000 ounces of silver in 5,500 lots on COMEX in a
short space of time was behind falling prices, said Afshin
Nabavi, head of trading at MKS in Switzerland.    
    "Clearly somebody sold it by mistake and bought it back
quickly, triggering stops below $1,250," said MKS trader Bernard
    UBS trader Joni Teves said the sudden drop in price was
amplified by a lack of liquidity as some Asian markets were
closed for a holiday while London was just opening.
    "Somebody's made a mistake there. Stops get hit as we go
lower and the algorithmic programs that jump on the back of
momentum moves exacerbate the move," said David Govett, manager
of precious metals and foreign exchange for Marex Spectron.
    "If it was a human error, they bought it back slowly over
the day."
    Looking more broadly, traders said gold was supported by
geopolitical uncertainty related a bailout of Italian banks, the
policies of U.S. President Donald Trump and Britain's
negotiations to quit the European Union. 
    "The world is in geopolitical chaos and gold is still good
insurance," said MKS's Sin.
    Allegations of ties to Russia have cast a shadow over
Trump's first five months in office while the British
government's looming Brexit talks are also fueling concern about
global stability.
    In Italy, meanwhile, the banking industry remains saddled
with 300 billion euros ($335 billion) of soured debts.
    Investors' lack of interest in gold can be seen at SPDR Gold
Trust      , the world's largest gold-backed exchange-traded
fund, where holdings dipped on Friday.          
    Elsewhere, silver        fell 0.5 percent to $16.60 an ounce
and platinum        slipped by 1.1 percent to $915.95.
    Palladium        edged up 1.8 percent to $867.05 after
registering its biggest intraday percentage decline since Jan.
25 on Friday.
($1 = 0.8943 euros)

 (Additional reporting by Nithin Prasad, Vijaykumar Vedala and
Apeksha Nair in Bengaluru, Jan Harvey in London; Editing by
David Goodman and Marguerita Choy)


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