Singapore - Gold was little changed in thin trade on Friday, heading
for its biggest annual loss in more than 30 years as hopes of a global
economic recovery and rallies in equities dent its appeal as an
Bullion has fallen more than 25% this year, hurt
partly by the long-expected tapering of the US Federal Reserve's
bond-buying stimulus programme, which has been a key driver of gold's
rally in recent years.
Gold hit an intraday low around $1 208 an ounce before
standing at $1 210.46 by 04:56, steady from Thursday. The precious
metal touched record highs above $1 900 in 2011, when a worsening debt
crisis in Europe sparked a buying rush.
"Sentiment I think is bearish for next year," said Ronald Leung,
chief dealer at Lee Cheong Gold Dealers in Hong Kong, adding that
declines in exchange-traded funds holdings could potentially drag down
"Gold may have to test at least $1 180 and then after
that, $1 100. Let's see how the physical demand is and how the economy
US gold eased 0.2% to $1 210.20/oz.
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.19% to 804.22
tonnes on Thursday from 805.72 tonnes on Tuesday.
In terms of ounces, holdings slipped to 25 856 464.05 ounces from 25 904686.51 - their weakest since 2009.
Dealers noted physical buying from Chinese consumers on Friday, but demand from Indonesia and Thailand had eased in recent weeks because of the countries' weakening currencies.
Premiums for gold bars inched up to a high of $2/oz above spot London
prices in Hong Kong, higher than $1.50 last week on some tightness at
the end of the year as dealers awaited the arrival of fresh supply from Europe next month.
Premiums in Singapore, a centre for bullion trading in Southeast Asia, were steady at $1.50 an ounce, with dealers watching the political drama in Thailand.
Thailand's government rejected a call from the Election Commission
(EC) on Thursday to postpone a February vote after clashes between
police and anti-government protesters in which a policeman was killed
and nearly 100 people were hurt.
"Indonesia has been quiet but it has exported a lot of gold in 2013 because of the weak currency," said a physical dealer in Singapore. "I guess for Thailand, we will have to wait and see. I don't think the protests will end unless there's a consensus."
In other markets, Asian markets were struggling to
match the performance of Wall Street on Friday even as Japanese economic
data impressed and the dollar tested the ¥105-barrier for the first
time in five years.