Gold loses shine as equities weigh

- 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 alternative investment.

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 sparked a buying rush.

"Sentiment I think is bearish for next year," said , chief dealer at Lee Cheong Gold Dealers in Hong Kong, adding that declines in exchange-traded funds holdings could potentially drag down prices.

"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 behaves."

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 and 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 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 next month.

Premiums in , a centre for bullion trading in , were steady at $1.50 an ounce, with dealers watching the political drama in .

rejected a call from the (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.

" has been quiet but it has exported a lot of gold in 2013 because of the weak currency," said a physical dealer in . "I guess for , 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.