NEW YORK (MarketWatch) -- Gold futures gave up early gains to trade lower early Thursday, with concerns that heavy-selling by hedge funds are set to resume once global bans on short-selling expires.
Gold first rose $10 to $720 an ounce, "however participants learned that hedge funds lost a further $100 billion in assets last month," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
"While some funds have halted redemptions, the expectation is that when the bans are lifted, the selling will resume," he wrote in a note.
Gold for December delivery was down 80 cents, or 0.1%, at $717.80 on the Comex division of the New York Mercantile Exchange.
The precious metal had posted some gain in electronic trade after news that the German economy, the largest of the euro zone, is now in recession. See full story. In Japan, the Nikkei fell sharply and more worrisome trends were revealed in U.S. weekly jobless claims. See full story.
But safe-haven flows were restrained as shares on Wall Street managed to open little changed after three days of losses. The Dow Jones Industrial Average first rose in early trade before falling slightly, down 27 points, while the S&P 500 index rose slightly.
