Bargain hunters pick up gold on Black Friday

Bullion bargain hunters made the most of thin post-Thanksgiving trading on US futures markets Friday, lifting the gold price above the psychologically important $1,250 an ounce level.

At the early lunchtime close on the Comex market gold for delivery in February, the most active contract, was changing hands at $1,251.00.

Around two-thirds of the usual the daily average of 150,000 contracts were traded.

Friday's jump helped to trim gold's November loss in value to 4.6%, after the metal earlier in the month dropped to levels last seen early July and within sight of the more than 3-year lows struck at the end of June when the metal briefly traded below the crucial $1,200 level.

Gold come under increasing pressure in November as large investors continued to shift money out of precious metals and into stocks.

US stocks this week set fresh records and year-to-date the S&P 500 index has risen 29%, the Euro Stoxx 50 Index is up almost 22%, and Japan's Nikkei has surged more than 50%.

In contrast gold has retreated 25% from its opening levels of $1,677 and is down more than $470 an ounce compared to this time last year.

The rotation out of golf investments is most striking when you consider the sharp decline in the holdings of the world’s largest gold ETF, SPDR Gold Shares (NYSE: GLD).

Bullion held by the fund established November 2004 are now at their lowest level since January 2009.

Net redemptions slowed dramatically from the torrid pace of the second quarter, but picked up again in October and November.

As of Black Friday GLD has experienced year-to-date outflows of 507 tonnes to 843.2 tonnes, down 37.6% from the start of the year.