June 28, 2012 / 3:23 AM / in 5 years

PRECIOUS-Gold down over 1 pct on US healthcare ruling, Europe

* Gold hits 4-week low, US equities, crude oil slide
    * U.S. Supreme Court upholds key part of healthcare reform
    * Markets dampened by poor expectations from EU summit

 (Adds details, updates market activity)
    By Frank Tang
    NEW YORK, June 28 (Reuters) - Gold fell more than 1 percent
on Thursday, hit by worries of an economic slowdown after a U.S.
Supreme Court ruling upheld a landmark healthcare law and by
fading hopes that a European Union summit will resolve that
region's debt crisis.
    Bullion investors were frustrated as it is unlikely that
additional stimulus will come out of the summit beginning
Thursday in Brussels, as European finance officials were working
on urgent measures to ease market pressure on Spain and Italy,
which are too big to bail out. 
    Earlier in the session, gold extended losses as crude oil
and U.S. equities tumbled after the Supreme Court upheld
President Barack Obama's healthcare law, which assesses a
financial penalty to individuals who do not obtain health
insurance. 
    "Individuals are perceived to have less to spend on other
goods and services, and companies are less willing to take on
additional projects, so you see industrial metals as well as
gold and silver sell off ," said Phillip Streible, senior
commodities broker at futures brokerage R.J. O'Brien.
    The metal has for the most part of this year moved in tandem
with riskier assets. In previous years, investors often flocked
to gold as a safe haven, driving its price higher in response to
economic fears.
    Spot gold was down 1.4 percent at $1,553.10 an ounce
by 3:16 p.m. EDT (1916 GMT), having earlier hit a four-week low
at $1,547.39.
    U.S. gold futures for August delivery settled down
$28 at $1,550.40. 
    Turnover has been light recently despite higher price
volatility, with trading volume about 30 percent below its
30-day average, preliminary Reuters data showed.
    Gold could drift lower in the near term as the market lacked
a clear direction because it is unlikely to see immediate
improvement or deterioration in the euro zone crisis, said James
Steel, chief commodity analyst at HSBC.
    A technical indicator showed that bullion's recent weakness
might have been exaggerated. Including Thursday's decline, the
metal lost five percent in the last seven sessions on deflation
fears.
    The relative strength index, or RSI, is currently at around
37, the weakest level since late May. A market is typically
considered oversold when it falls below 30. 
    After a sizzling 11-year bull run, bullion is heading for a
7 percent loss for the second quarter, its largest quarterly
fall in eight years. It is almost flat year-to-date. 
    
    PHYSICAL DEMAND LAGS
    The physical market was deserted ahead of the EU summit.
Weak rupees have pressured bullion demand from India, the
world's largest consumer of the precious metal. 
    Japan's exports of gold plunged to a 15-month low in May to
2.79 tonnes, down 67 percent from a year ago. 
    Among other precious metals, silver was down 2.2
percent at $26.33 an ounce, while spot platinum fell 1.6
percent to $1,381.25 an ounce. Spot palladium dropped 2.2
percent to $559.88 an ounce.
    Palladium earlier fell to its lowest level since October
2011 at $556, pressured by losses in industrial metals and
concerns the weak economy would depress demand for the
autocatalyst metal.
    
 3:16 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1550.40 -28.00  -1.8  1547.60 1579.60  127,554
 US Silver JUL  26.247 -0.695  -2.6   26.070  27.065   22,563
 US Plat JUL   1386.40 -23.30  -1.7  1382.00 1418.10    3,946
 US Pall SEP    563.90 -15.85  -2.7   560.60  582.50    4,970
                                                               
 Gold          1553.10 -21.30  -1.4  1548.46 1578.70         
 Silver         26.330 -0.580  -2.2   26.160  27.120
 Platinum      1381.25 -22.90  -1.6  1389.00 1413.75
 Palladium      559.88 -12.87  -2.2   563.00  581.25
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        139,427   207,184   196,420     21.21    0.77
 US Silver       82,336    58,874    57,842     31.14    0.79
 US Platinum     14,911    11,147     8,897        23    0.00
 US Palladium     5,032     4,995     4,601                  
                                                               
 

 (Additonal reporting by Jan Harvey in London; Editing by Bob
Burgdorfer and Jim Marshall)

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