Gold slips as Brexit tensions ease and stocks rally

By Clara Denina

LONDON (Reuters) - Gold fell for a second straight day on Tuesday as global equities rallied on easing political uncertainty in Britain and hopes for more economic stimulus, which in turn curbed demand for assets perceived as a safe haven.

Spot gold was down 0.6 percent at $1,347.56 an ounce by 1201 GMT after losing nearly 1 percent on Monday, which was its biggest decline in almost two weeks.

U.S. gold was down $7.90 at $1,348.80.

"Tensions in Britain are easing for now, as the country will soon have a new prime minister," ActivTrades chief analyst Carlo Alberto de Casa said.

"With the British pound gaining some ground, demand for gold and other safe havens is decreasing," he said, adding that the next support level for gold would be around $1,340.

Gold has gained about $100 an ounce since the United Kingdom voted to leave the European Union, with worried investors piling their cash into safe-haven assets.

However, Asian stocks hit a 2-1/2 month peak on Tuesday and European shares were on track for a fourth straight day of gains on hopes of more stimulus from global policymakers. [MKTS/GLOB]

Japan's ruling coalition fanned expectations of more fiscal stimulus, while the Bank of England could cut rates as soon as Thursday following its monthly policy meeting.

Markets were also assessing whether the latest U.S. jobs data has boosted the prospects for an interest rate increase by the U.S. Federal Reserve.

Gold came under pressure after strong U.S. non-farm payrolls data on Friday boosted some expectations for a U.S. rate rise.

Kansas City Federal Reserve President Esther George said on Monday that U.S. interest rates were too low and signalled that she could be ready to resume her push within the Fed's rate-setting committee for increases.

Lower rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion while weighing on the dollar, in which the metal priced.

"Not too long ago, gold prices would have withered on prospects of higher stock prices, but not this time around; investors are thinking that the spate of monetary easing is likely to persist for some time to come, keeping both gold and equities fairly well supported," INTL FCStone said in a note.

The European Central Bank will not ease monetary policy any further at its meeting next week, according to an overwhelming majority of respondents in a Reuters poll of euro money market traders.

Silver was down 0.2 pct at $20.21 an ounce.

Platinum, which rose to a 13-month high of $1,104.10 on Monday, fell for the first time in two weeks, down 1.2 percent at $1,090.

Palladium was unchanged at $620.

(Additional reporting By Nallur Sethuraman in Bengaluru; Editing by David Clarke and David Goodman)