UPDATE 1-SPDR gold holdings drop for 7th day in record stretch of outflows
* SPDR Gold Trust holdings fall for 7 straight sessions
* On track for biggest-ever monthly outflow
* Bullion losing appeal as safe-haven asset
By Rujun Shen
SINGAPORE, Feb 28 (Reuters) - Holdings of SPDR Gold Trust fell for a seventh straight session on Wednesday in a record stretch of outflows, as signs of an improving global economy dull bullion's appeal as a safe-haven asset.
Holdings of the world's biggest gold-backed exchange-traded fund dropped to a more than six-month low at 1,258.4 tonnes. They are on course for a record monthly decline after falling nearly 70 tonnes so far in February.
"It is difficult to motivate people to buy gold (at the moment)," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.
A raft of robust economic data from the world's main economies has driven a stellar performance by global stock markets, with the S&P 500 Index climbing more than 6 percent so far this year, compared to gold's nearly 5-percent decline.
Schnider added that although the global economic outlook had brightened, inflationary pressure remained low as growth was still gathering momentum, dimming gold's attraction as a hedge against inflation.
"Monetary policy stays loose, growth accelerates meaningfully and price pressure builds -- this will be supportive for gold. But inflation is not there (yet), and we need to see growth for higher gold prices."
SPDR Gold Trust's holdings marked a record high of 1,353.346 tonnes in December last year. They account for more than half the total holdings of the world's major gold ETFs tracked by Reuters, which stood at about 2,267 tonnes as of Feb. 26.
Spot gold hovered just below $1,600 an ounce on Thursday, down 17 percent from a record high of $1,920.30 hit in September 2011.
Speculative investors have become much less bullish on gold. They cut the net long positions in U.S. gold futures and options to the lowest since late 2008 in the week to Feb. 19, data from the U.S. Commodity Futures Trading Commission showed.
- Ukraine says Russian tanks flatten town; EU to threaten more sanctions |
- F-16s dispatched for unresponsive pilot of small plane near D.C.
- EU wields Russia sanctions threat but timing vague |
- Trapped peacekeepers at Golan Heights moved to secure area: Philippine military chief
- Polish president warns Germany of Putin's 'empire' ambitions