Gold Steadies After One Week Low

Gold hovered near a one-week low on Friday, pressured by firming equities, while dealers took a drop from a record high in the world's largest gold-backed exchange-traded fund as a sign investor demand may be receding.
Holdings of New York's SPDR Gold Trust fell 0.7% from the record high it had climbed to on 9 April, the biggest decline this year.
The holdings fell to 1,119.43t by 16 April, down 8.25t from the previous day. The trust's holdings have fallen about 1% so far in April, versus a rise of roughly 4% in the comparable period last month.
Comments by European Central Bank (ECB) president Jean-Claude Trichet on Friday, which currency market participants said held no surprises, nevertheless accelerated a fall in the euro, although gold failed to budge.
The euro hit a one-month low against the dollar, dented by uncertain prospects for the euro zone economy.
Trichet said in Tokyo that banks would be the focus for any unconventional policy response to the financial crisis, and that the ECB needed a strategy to eventually reverse those measures.
Gold fell to a one-week low on Thursday on signs of a slowdown in investment demand on budding optimism that the economy was on the mend.
Sluggish physical buying has also failed to provide much support for prices, analysts said.
"Gold markets are much lower ... as the stock markets are moving higher again," said Adrian Koh, an analyst at Phillip Futures.
Investment demand had buoyed gold to above $1,000 an ounce in late February, but bullion has since lost more than 12%.
Koh said that although he was technically a little bearish about gold in the near term, he believed gold's long-term prospects remained solid.
"Yes, we are starting to see a bit of a decline (in the SPDR), but it's still not a very large figure, compared to how much we have gained in gold holdings over the past couple of months," he said.
Gold was at $874.90 per ounce by 07.02GMT, up 0.04% from New York's notional close of $874.55.
It has fallen more than 2% since the beginning of this week.
India's gold buyers continued to trickle in to stock up the yellow metal to meet festive demand, traders said.
Akshaya Tritiya, which falls on 27 April, is the second-most auspicious day to buy gold after Dhanteras.
Koji Suzuki, a senior analyst at SBI Futures, said gold was drawing some support from a recovery in demand from parts of Asia, such as China. He added that he expects gold to recover.
"Gold is sinking now because of the outflow of funds and technical profit-taking," he said.