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Gold pares losses

NEW YORK: COMEX gold eased back slightly by midday, paring some of the morning's losses but still unable to fully recover from the opening tumble, traders said.

Sizeable trade buying stopped the market from falling further during the commission house and fund selloff earlier, a floor source said.

"But in the recovery, the market has been unable to get over $396.00 basis June and the volume has dried up," the source said. At 1202 EDT June gold was down $1.90 at $395.20 an ounce, traded $395.90 to $394.70.

MCM Tradewatch said the market must be getting tired of June gold failing to break back above $400 an ounce - the latest CFTC report showed that large trader longs have slipped in recent weeks to 29,963 contracts, while small traders reduced as well.

"Gold is on $393 to $396 supports, and a break probably flushes remaining longs," the MCM Tradewatch report said.-Reuter