By Lewa Pardomuan
SINGAPORE (Reuters) - Gold ticked down on Monday, heading for its biggest annual loss in more than three decades at nearly 30 percent, as firm equities and the prospect of a recovery in the global economy stole its shine.
Bullion has been on a roller-coaster trade in 2013. A plunge to a 2-year low in April unleashed pent-up demand from retail investors, but prices sank again in June to a near 3-year low on worries over a plan by the U.S. Federal Reserve to wind down its monetary stimulus.
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, were at their lowest since 2009.
Gold fell 0.21 percent to $1,210.21 an ounce by 0335 GMT, sharply lower than record highs above $1,900 in 2011, when a worsening debt crisis in Europe sparked a buying rush.
"There's definitely physical buying supporting gold. But I would say physical buyers are more of price takers than price setters. I would say there's a slight downward bias today," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.
"I don't think the outflow from ETF will end anytime soon. It may extend into half a quarter or even full quarter of next year before we may potentially see any signs in a pickup in interest again. Sentiment is still bearish... I don't think people will make major moves."
Gold is set to end a 12-year rally ignited by rock-bottom interest rates and measures taken by central banks to prop up the global economy, which burnished the metal's appeal as a hedge against inflation.
U.S. gold slipped 0.34 percent to $1,209.90 an ounce.
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.
"Some of the dealers are out of stocks, waiting for new gold bar supply to arrive in January. Some are even quoting premiums at above $2 an ounce, depending on the period of sale," said a dealer in Hong Kong.
"There's a little bit of buying on the physical side. The price is still at the lower end and it's pointing southward. Selling on the ETF has put a cap on prices."
In other markets, Japanese shares looked to end a stellar year with a flourish, rising to another six-year peak as the yen skidded to fresh lows for a third straight session.
(Editing by Richard Borsuk)