July 20, 2015 / 4:36 PM / 4 years ago

European shares retreat from six-week highs; gold miners fall

* FTSEurofirst 300, STOXX 600 up 0.3 pct

* Stocks close near day’s lows, precious metal miners weigh

* Chemicals companies lifted by merger talk

* Julius Baer slides after tax-dodging charge (Updates with closing prices)

By Alistair Smout

LONDON, July 20 (Reuters) - European shares backed away from six-week highs on Monday even as Greece began to return to normal after agreeing on terms for a new bailout package. A drop in gold prices hurt mining stocks.

The FTSEurofirst 300 index closed 0.3 percent up at 1,613.95 points, near the day’s trading lows, after earlier hitting its highest level since May 29 at 1,621.31 points. The broader STOXX Europe 600 also ended the day 0.3 percent higher.

Volatility has halved in less than two weeks on the prospect of a new deal to resolve Greece’s debt crisis. On Monday, Greek banks reopened and the country began paying off billions of euros owed to international creditors.

“We see this as still being a rising market ... There may be some more volatility ahead, but focus is turning to the second-quarter company results season and the numbers should be solid,” said Christian Jimenez, head of asset manager Diamant Bleu Gestion in Paris.

Precious metal miners soured the mood. Fresnillo fell 4.4 percent and Randgold 4.7 percent after gold hit a five-year low.

OCI was the top gainer, up 14.1 percent after the Amsterdam-listed chemical company confirmed it was in advanced merger talks with U.S. fertiliser maker CF Industries Holdings Inc.

Norwegian peer Yara International rose 1.7 percent. Yara sold a 50 percent stake in its British fertiliser manufacturer to CF Industries, its joint venture partner, three weeks ago and traders said further M&A activity could follow.

“CF held talks with Yara last year ... and we still see the potential for continual activity in this space,” said Atif Latif, director of trading at Guardian Stockbrokers.

Swiss asset manager Julius Baer fell 1.4 percent after its first-half net profit slid. The firm took a $350 million charge towards an expected settlement in a U.S. criminal investigation into how the Swiss bank helped wealthy Americans dodge taxes.

In Greece, banks were reopening across the country after a three-week shutdown, officials said, although the Athens Stock Exchange remained closed.

German Chancellor Angela Merkel called on Monday for swift aid talks so Athens could also lift withdrawal limits. Changing the maturities of Greek debt or reducing the interest Athens has to pay would be open for discussion, she said, after the first successful review of the new bailout package.

Euro zone banks rose 0.8 percent.

But traders warned the market might pause after the recent rally, exposing “long” bets on a rising market to future falls.

“Given the rally we have seen in the broader European market, we see this an opportune time to trim longs and add some downside protection,” Guardian’s Latif said.

Europe bourses in 2015: link.reuters.com/pap87v

Asset performance in 2015: link.reuters.com/gap87v

Today’s European research round-up

Editing by Catherine Evans and Susan Thomas

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