Gold edged lower on Monday after rising by the most since November in the previous session on poor US jobs data, with funds expected to continue cutting bullion holdings for better investment yields elsewhere. But gold futures in Tokyo jumped almost 5 percent to near all time-highs, marking their sharpest daily rise since September 2011, after the yen dropped to near four-year lows on reports the Bank of Japan would begin buying longer-dated bonds immediately to beat deflation.
Spot gold had dropped 0.2 percent to $1,578.94 an ounce by 0642 GMT, also hurt by a firmer dollar versus a basket of currencies. "People are really pulling funds out of gold for better investments such as equities and real estate in emerging economies," said Liu. "The kind of rally that we saw from 2009 to 2011 is no longer going to be there anymore. We are more or less used to having so much money flowing around in the economy."
US gold futures were up 0.2 percent at $1,579.10 an ounce. Bullion holdings at the world's major gold exchange traded funds continued to fall, hitting their lowest since August 2012. In Tokyo, gold futures surged as much as 4.8 percent to 5,025 yen ($51.71) per gram, near the record high of 5,081 yen touched in February, as the yen faltered. The most-active February contract on the Tokyo Commodity Exchange closed up 4.5 percent at 5,015 yen, the biggest single-day percentage increase since September 27, 2011.
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