Gold hang on around $1,200, worries of tapering still remain

Gold hang on around $1,200, worries of tapering still remainGold prices remain steady on Monday after its biggest weekly loss in a month, but the metal was still at the threat of falling back below $1,200 an ounce as investors fussed over the impact of a U. S. stimulus tapering.

Prices were supported in thin Asian trading as holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 5.40 tonnes to 814.12 tonnes on Friday - the first inflow since November 5.

Joyce Liu, an investment analyst at Phillip Futures Pte Ltd. Said, "There seem to be subtle shifts in sentiments for more bullishness after $1,200 was broken."

"However, the upside is limited due to year-end holiday season and with prices now treading close to $1,200, a break below that level may shift market sentiments back to bearishness."

Spot gold eased 0.1 percent to $1,201.25 an ounce by 0328 GMT. It increased 1 percent on Friday on short covering after losing 4 percent in the previous three sessions.

Last week gold fell 3 percent, after the Fed said the U. S. economy was strong enough to scale back its massive bond-buying stimulus, winding down an era of easy money that saw gold rally to an all-time high of $1,920.30 an ounce in 2011.

The metal has fallen nearly 30 percent this year on fears that a scale back of stimulus would hurt its inflation-hedge appeal. This year the decline of gold has seen its biggest fall in 32 years.