By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold futures fell in Asia Friday in cautious trade amid broad losses for regional equity markets, although some analysts remained hopeful demand would improve once Chinese buyers returned from the weeklong holidays in the country.
Gold futures for delivery in April GCJ3 -0.50% slipped $3.40, or 0.2%, to $1,632 an ounce. The decline came on top of a $9.60 decline on the Comex division of the New York Mercantile Exchange Thursday, when the yellow metal settled at its lowest price for a most active futures contract since Aug. 20.
The precious metal has already lost more than 2% so far this week amid the Lunar New Year holidays in China — a nation with a large demand for gold jewelry. But with mainland Chinese markets set to reopen Monday, some analysts expected physical demand to gradually return and lend support to the metal’s prices.
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“We have seen anecdotal evidence of a pickup in physical bullion demand as investors sidelined by the Lunar New Year celebrations are slowing returning into the gold market. This may help curb potential further losses in the gold market, we believe,” analysts at HSBC wrote in a note to clients.
Meanwhile, the metal’s drop coincided with reports that hedge-funds run by billionaire investors George Soros and Louis Moore Bacon cut holdings of gold exchange-traded products.
Bloomberg News cited a U.S. Securities and Exchange Commission filing as showing that Soros Fund Management LLC cut its holding in SPDR Gold Trust GLD -0.44% by 55% in the three months to Dec. 31, while Bacon’s Moore Capital Management LP sold its entire stake in that fund. See: Soros cuts stakes in gold-backed ETF .
However, Paulson & Co., a hedge fund run by John Paulson, continued to own 21.8 million shares in the SPDR gold fund and remained its largest investor during the quarter, maintaining his significant holdings in the precious metal, according to Reuters.
Friday’s drop came as most regional Asian markets declined in a generally risk-averse environment Friday, and despite a weakened U.S. dollar. Read Asia Markets .
The ICE dollar index DXY +0.08% , a measure of the greenback’s moves against a basket of six major global currencies, slipped to 80.265 from 80.288 in North America late on Thursday. A weaker dollar often supports commodities, including gold, by making their prices more attractive to holders of other currencies.
Among other metals, March futures for silver SIH3 -0.50% fell 11 cents to $30.25 an ounce.
Copper for delivery in the same month HGH3 +0.07% added 0.1% to $3.74 a pound and March palladium futures PAH3 -0.53% slipped 0.3% to $761.50 an ounce.
April platinum futures PLJ3 +0.26% dropped 1.1% to $1,692.90 an ounce.
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