Gold falls in Europe

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.
Stocks are now well above last week's lows, hit after European equities posted their biggest one-day slide in almost four years. Gold rallied to a six-week high at $1,255.20 on Tuesday before stock markets turned around. "We are in this phase when the markets are closely watching the economic backdrop and the actions of central banks," Julius Baer analyst Carsten Menke said.
"If markets get confirmation that the backdrop is (improving), that should be positive for the equity markets ... while it should further weigh on safe-haven demand for gold and reduce investors' willingness to pay for gold as insurance." Interest in precious metals in Asia was muted overnight after the dollar strengthened on Wednesday, precious metals house MKS said in a note.
"There was marginal physical interest from China to move gold up to a session high ... but the demand was short-lived and the lack of follow-through buying had the yellow metal back towards the session low in afternoon trade," it said. "The recent physical support we have been seeing from India has now waned as they celebrate during their festival season." Silver was up 0.5 percent at $17.16 an ounce, while spot platinum was down 0.3 percent at $1,254.50 an ounce and palladium was up 0.2 percent at $768.97 an ounce. Full production at Anglo American Platinum's strike-hit mines in South Africa resumed a month ahead of schedule in September as operations bounced back from a five-month strike, the company said on Thursday.