Gold ticked lower on Friday, on track to end the quarter with a loss of nearly 5 percent, as the euro stayed weak and a rally in equities boosted appetite for riskier assets. Worries about the fiscal stability of the eurozone had sent gold prices to a 1-month high last week.
Gold fell $1.18 an ounce to $1,594.99 by 0332 GMT in extremely thin trade as many markets in Asia were closed for Good Friday. Prices were down 4.7 percent for the first quarter - its second consecutive quarterly loss. US gold futures were untraded. But the most active contract on Tokyo Commodity Exchange, February, hit a low of 4,842 yen a gram, its weakest in three weeks, on position squaring on the last business day of the fiscal year.
"Looking ahead, gold is likely to stay in the current range of $1,590 and $1,605," said Kaname Gokon, general manager at Okato Shoji Co's research section, referring to next week's trading range. "But there are chances that those who have bought TOCOM futures on a weaker yen may start closing their long positions if a market focus is shifted to a stronger dollar, which is negative to gold."
Japanese speculators were unfazed by an escalating tension in the Korean Peninsula after North Korea said it had put rocket units on standby to attack US military bases in South Korea and the Pacific. "Basically, the general public and industrial companies are not doing anything at this moment. Liquidity is also limited. Premiums for gold bars are flat," a physical dealer in Tokyo said.
Gold bars in Tokyo were on par with spot London prices, unchanged from last week. The physical markets were closed in Singapore and Hong Kong. Premiums in both gold trading centres stood at between $1.20 and $1.50 an ounce on Thursday. In other markets, the euro hovered near four-month lows against the dollar and was poised to end the first quarter recording a roughly 2.9 percent loss - its first quarterly decline since the second quarter of 2012.
Gold investors are now waiting for the release of US CFTC commitment of traders data at 1930 GMT for more trading cues. Hedge funds and money managers raised their bullish bets in gold by 63 percent and added their net short position in copper to a fresh four-year high in the week to March 19, Commodity Futures Trading Commission data showed last week.
