By Clara Denina/Reuters
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.