NEW YORK (Commodity Online): Barclays Capital is making relatively few changes to their trading portfolio in December, but one major adjustment is closing out their long-standing position - long gold.

"This is a short-term tactical move rather than signifying any change in our medium-term positive view on gold prices, which we think will regain upward momentum once the European debt crisis is stabilised and market participants once again become concerned about inflation risk," said Barclays.

It is clear, however, that the ongoing concerns about the European sovereign debt crisis and the strength of the dollar as a safe haven is resulting in heavy downward pressure on prices. Losses in other investments are also forcing those who have bought gold to sell their position.

Crucially, investment flows into gold that had shown signs of stabilising in early December have weakened again as prices dropped below the 200-day moving average for the first time since January 2009.

“Until these pick up again in a concerted fashion, gold prices are likely to struggle to gain traction; thus, for now, we will wait on the sidelines. We are also closing our in-the-money US gas short, in order to reduce our exposure to the risk of colder weather in early 2012,” Barclays added.

Meanwhile, Barclays is adding one new trade - long US Gasoline spreads.

"Our long position in US gasoline spreads is predicated on a relatively stable outlook for crude oil, supporting US domestic gasoline demand, but a heavy US refinery maintenance program limiting supply."

“In our view stronger summer 2012 gasoline prices are required in order to incentivise refinery runs and we advocate a long position in the August-September NYMEX RBOB spread,” Barclays concluded.