Gold ETFs were down nearly 2% on Friday as April futures contracts briefly dipped below $1,600 an ounce. The precious metal ETFs were on track for weekly declines of about 4%.
Gold was weak following reports that George Soros cut back his position in the largest bullion-backed ETF. [Gold ETFs and Hedge Funds]
Soros was selling gold in the fourth quarter as demand hit an all-time record at the end of 2012 on greater investment interest in gold and related exchange traded funds and increased central bank hoarding.
Annual gold demand on a value basis rose to $236.4 billion in 2012 as gold prices record another yearly high, according to a World Gold Council annual report.
Considering gold demand on a value basis, both jewelry and investment demand hit their highest level in six quarters, with jewelry demand at a record value in 2012.
However, on a tonnage basis, demand was 4,405.5 metric tons over the year, or down 4% from 2011 as demand from institutional investors and central banks partly offset a year-over-year drop in consumer demand.
Looking at the total gold demand, jewellery made up 43%, technology 10%, bar and coins 29%, ETFs and other funds 6% and central bank net purchases 12%.
Central bank purchases rose 17% year-over-year, totaling 534.6 tons, the highest level in 48 years.