LONDON, Dec 28 — Gold edged up yesterday, supported by some physical buying, but remained on track for its biggest annual loss in three decades as rallies in equities and prospects of global economic recovery dented its appeal.

Expectations that the US economy can stand on its own as monetary stimulus is withdrawn were buoyed by data on Thursday showing a decrease in weekly jobless claims.

US equities ended little changed yesterday, but the Dow and S&P 500 wrapped up a second straight week of solid gains. US Treasury yields hit their highest since July 2011 above 3 per cent.

Gold was up 0.19 per cent to US$1,213.45 (RM3,989.46) at 4:40pm (2140 GMT), while US gold futures for February delivery settled up 0.1 per cent at US$1,214.00 an ounce.

“The market is probably going to stay in wide ranges for the next few sessions and there will still be some support from Asian buyers ahead of the Chinese New Year at the end of January,” VTB Capital analyst Andrey Kryuchenkov said.

Thin volumes may increase volatility until investors return from holidays.

“I think they will liquidate again into this price rebound as there is no fundamental reason to buy the metal,” he said.

Bullion fell to a six-month low of US$1,185.10 last week, after the US Federal Reserve said it would begin tapering its US$85 billion in monthly bond purchases next month, before recovering slightly.

Biggest annual decline in 32 years

Gold is headed for a near 30 per cent slump in 2013, ending a 12-year rally prompted by rock-bottom interest rates and measures taken by global central banks to prop up the economy, which encouraged investors to put their money in non-interest-bearing assets such as gold.

This year’s decline is set to be gold’s biggest since 1981, while current prices are 37 per cent below an all-time high of US$1,920.30 hit in 2011.

As a gauge of investor interest, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.19 per cent on Thursday to 804.22 tonnes, the weakest since 2009.

Physical buying among Chinese consumers edged up yesterday, but demand from Indonesia and Thailand has eased in recent weeks due to their weak currencies.

Premiums for gold bars inched up to a high of US$2 an ounce above spot London prices in Hong Kong, from US$1.50 last week, as dealers awaited the arrival of fresh supply from Europe next month.

An improving global economic outlook helped platinum and palladium stage a year-end rally.

After rising the most since mid-October in the previous session, spot platinum hit a two-week high of US$1,377 an ounce. It pared gains due to technical selling and closed up 1.2 per cent at US$1,371.50 an ounce.

Spot palladium rose to US$714 an ounce, its highest since December 17, and closed up 1.5 per cent to US$707.75 an ounce, its biggest daily gain since December 4.

In other precious metals, silver was up 1.6 per cent to US$20.03 an ounce, having posted its biggest daily gain for two weeks, on Thursday. Silver is down 35 per cent this year in its worst annual performance since at least 1982. — Reuters