Gold steady above $1,200, but tapering worries remain

SINGAPORE, Reuters (23/12) - Gold ticked up Monday after its biggest weekly loss in a month, but the metal was still at the risk of falling back below $1,200 an ounce as investors fretted over the impact of a U.S. stimulus tapering.

Spot gold edged up 0.1 percent to $1,203.91 an ounce by 0018 GMT. It rose 1 percent on Friday on short covering after losing 4 percent in the previous three sessions. Gold fell 3 percent last week after the Fed said the U.S. economy was strong enough to scale back its massive bond-buying stimulus, winding down an era of easy money that saw gold rally to an all-time high of $1,920.30 an ounce in 2011. Gold has fallen nearly 30 percent this year as a scale back of stimulus hurts its inflation-hedge appeal. Hedge fund managers cut their bullish bets on gold only modestly this week before the first-ever tapering of the U.S. monetary stimulus sent the precious metal's price to six-month lows, data released on Friday showed. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 5.40 tonnes to 814.12 tonnes on Friday. The volume of gold transferred between accounts held by bullion clearers rose by 22 percent to an average of 24.2 million ounces a day, the London Bullion Market Association said.