By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold fell Thursday as flight-to-quality buying slackened, with buyers more attracted to riskier assets such as stocks.
Gold for August delivery, the most active contract, lost $3.50, or 0.3%, to $1,219.20 an ounce on the Comex division of the New York Mercantile Exchange.
"Right now, people are feeling a little bit more comfortable with the Europe," said Matt Zeman, a trader at LaSalle Futures Group in Chicago. "Gold has lost a little of bit of the flight-to-safety buying in the last couple of sessions."
Investors are also taking profits after catching gold's rebound last week, he added.
And at least one prominent investor -- Mohamed El-Erian, chief executive and co-chief investment officer of bond giant Pacific Investment Management Co. -- disclosed recently he has cut his gold holdings by half.
ER-Erian said he would "wait and see how the deleveraging process plays out. I think that if the world (reduces debt), which is not immaterial, then gold will be hit."
El-Erian said PIMCO had recently halved its gold allocation, and that the firm still thinks a gold allocation still makes sense "but not as much as we used to."
As investors flocked to riskier assets, LaSalle's Zeman said if "equities can stay strong keep gold prices depressed for the time being."
Gold is not expected to slide dramatically, but gold buyers usually don't want to wade into the market at higher prices. "This is a buy-in-the-dips kind of market," he said. "I still like gold long term (as) people continue to lose faith in fiat currency."
Gold ended 0.4% lower on Wednesday, at $1,222.60 an ounce and snapping a winning streak of six straight sessions of gains. Gold on Tuesday had finished at its highest since May 17.
Other metals were mixed, with copper for July delivery losing 4 cents, or 1.3%, to $3 a pound. Platinum for July delivery added $11.60, or 0.7%, to $1,562.30.
The SPDR Gold Trust (GLD 118.95, -0.83, -0.69%) , the largest exchange-traded fund backed by gold, lost 0.5%.
The dollar index (DXY 86.73, -0.06, -0.07%) , which compares the U.S. unit to a basket of six currencies, was flat at 86.80.
Stocks opened higher on Thursday after key job reports showed modest improvements in the labor market and retailers reporting May same-store sales largely beat expectations.
The Labor Department said initial claims for jobless benefits fell by 10,000 to 453,000 in the week ended May 29. Economists had expected a drop of about 5,000.
