LONDON: Gold fell on Thursday as stronger-than-expected economic data and upbeat corporate results lifted stocks in Europe and the United States, while the dollar index held near a one-week high and demand for physical metal eased.
Outflows from gold-backed exchange-traded funds suggested investment appetite for bullion was softening, analysts said. The arrival of the Diwali festival in India was expected to mark the end of a period of upbeat demand there.
Spot gold was down 0.5 percent at $1,234.30 an ounce at 1352 GMT, while US gold futures for December delivery were down $11.00 an ounce at $1,234.50.
Holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, fell 0.3 percent on Wednesday to 749.87 tonnes, the lowest since late 2008. Outflows from the fund this week have now topped 11 tonnes, the most of any week since mid-September.
"We're still having outflows from physically backed gold funds; from the beginning of the year, we've had 90 tonnes," Natixis analyst Bernard Dahdah said. "Western investors still aren't very excited about holding gold."
"(They are) trying to start investing now with the view that the future in the United States looks much brighter, and on expectations for interest rates. The fear of currency debasement has dissipated, and that was the biggest reason behind those investors investing in gold."
On the wider markets, the dollar index held near the previous day's one-week high. European stocks firmed after data showed euro zone businesses were performing much better than expected this month, albeit by slashing prices again.
Wall Street stocks also rose at the open after a number of strong results reassured investors that corporations were faring well despite concerns about global economic growth.
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