REFILE-PRECIOUS-Gold slips, set for biggest annual loss in 32 years

* Gold under pressure from firm equities

* SPDR gold holdings fall 3 tonnes on Friday

* Nov. China imports from Hong Kong down 42 pct

By Clara Denina

LONDON, Dec 30 (Reuters) – Gold fell in thin holiday trade

on Monday, heading for its biggest annual loss in more than

three decades at nearly 30 percent, as rising appetite for risk

and the prospect of a global recovery tarnished its allure.

European stocks hovered around five-year highs after two

weeks of strong gains, following from a six-year peak in

Japanese shares.

“What’s currently driving investors is the idea that

commodities are out of fashion and equities are in demand,”

Quantitative Commodity Research owner Peter Fertig said.

“And, with low inflation pressures, there is still some

downside risk for gold as long as the stock market remain

relatively robust.”

Gold is usually seen as an hedge against inflation, which

has stopped to be a concer for investors for the time being.

Spot gold fell to a session low of $1,200.79 an ounce

in earlier trade and was down 0.6 percent to $1,205.40 by 1456

GMT, while U.S. gold futures for February delivery

slipped $9.00 to $1,204.90 an ounce.

“For the time being, price moves will be exaggerated by the

lack of liquidity … but in the absence of any fresh macro news

I don’t think we are going to break below $1,190 or above

$1,225,” MKS SA head of trading Afshin Nabavi said.

Gold’s performance in 2013 has put an end to 12 straight

years of growth, with prices hit by the U.S. central bank’s

decision to rein in its monetary stimulus, which will raise the

opportunity cost of holding the non-yielding asset.

Expectations that the U.S. economy will improve and the rest

of the world’s growth will stabilise in 2014, have further

undermined the case for holding bullion, as investors look to

put their money in riskier assets like equities.

In wider markets, the dollar fell 0.4 percent versus

a basket of currencies as the 10-year U.S. notes yield

steadied below an earlier two-year high.

FUND HOLDINGS FALL

Heavy outflows from gold-exchange traded funds also

reflected investors’ diminishing interest. Holdings on SPDR Gold

Trust, the world’s largest gold-backed exchange-traded

fund, fell three tonnes on Friday to their lowest since Jan.

2009 at 801.2 tonnes.

The physical market saw a few deals among trading houses and

jewellers, keeping premiums for gold bars steady at $2 an ounce

to the spot London prices in Hong Kong, a centre for bullion

trading in East Asia.

Premiums in Singapore were steady at $1.50 an ounce to the

spot London prices, but there wasn’t much activity.

China’s net gold imports from Hong Kong fell 42 percent to

76.393 tonnes in November from 131.19 tonnes in October,

reflecting a drop in demand after strong purchases in previous

months.

Silver fell 1.9 percent to $19.67 an ounce. Silver is

down 35 percent this year in its worst annual performance since

at least 1982.

Spot platinum was down 1.2 percent at $1,355.50 an

ounce, snapping four consecutive sessions of gains. Spot

palladium was up 0.6 percent to $711.97 an ounce.

(Additional reporting by Lewa Pardomuan in Singapore; Editing

by William Hardy)

REFILE-PRECIOUS-Gold slips, set for biggest annual loss in 32 years