July 7, 2016 / 9:55 AM / 3 years ago

PRECIOUS-Gold slips as dollar firms but Brexit concerns persist

* Brexit concerns keep gold near two-year high
    * Traders await U.S. non-farm payroll data on Friday
    * GRAPHIC-2016 asset returns: reut.rs/1WAiOSC

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, July 7 (Reuters) - Gold slips as U.S. jobs
data supports the dollar, ending a six-day rally that pushed the
precious metal to more than a two-year high on concerns about
Britain's vote to leave the European Union.
    Financial markets have been extremely volatile since the
June 23 "Brexit" vote, knocking equities and pushing some bond
yields to record lows. That in turn has boosted the appeal of
so-called safe-havens such as gold and silver. 
    Spot gold was off 0.2 pct at $1,360.26 an ounce by
2:41 p.m. EDT (1841 GMT), down from Wednesday's peak of
$1,374.91, the highest since March 2014.
    U.S. gold futures for August delivery settled down
$5, or 0.4 percent, at $1,362.10 per ounce.
    Mitsubishi analyst Jonathan Butler said while a strong
dollar was a headwind for gold, it still looked set for further
gains after rallying more than 10 percent since the Brexit vote.
    "I think gold could make further gains towards $1,381, the
38.2 percent Fibonacci retracement of 2011 high to 2015 low, and
above that the $1,400 psychological level," he said.
    Traders are awaiting further clues on the outlook for
Federal Reserve policy from Friday's U.S. non-farm payrolls
data, seen as a barometer of the economy's health. 
    "The declines are limited in part because the financial and
economic fundamentals haven't changed, although we've had a very
slight bounce in yields, which may be getting some raison d'etre
for gold to be able to come back," said James Steel, chief
metals analyst for HSBC Securities in New York, adding that
profit-taking pressured prices.
    "Tomorrow is going to be the big one. There have been
concerns about if the data's going to be good and that's put
gold under pressure again."
    U.S. private payrolls in June were stronger than expected,
according to a report on Thursday, adding pressure to gold
prices. 
    "In the short term, I do see a risk that the dollar will
rise further, so that will again cap the upside for gold," said
Danske Bank analyst Jens Pedersen.
    Elsewhere, data showed China's gold reserves rose to 58.62
million ounces at the end of June from 58.14 million a month
before. 
    Silver was down 1.8 pct at $19.71 an ounce, while
platinum was up 0.1 percent at $1,082.49 an ounce and
palladium was up 0.1 percent at $$605.22 an ounce.    

    
 (Additional reporting By Nallur Sethuraman and Vijaykumar
Vedala in Bengaluru; Editing by Greg Mahlich and Steve Orlofsky)
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