Gold Dips After Big Rally, but Sees Strong Support Above $1,200

© Reuters. Gold dips on profit-taking as Wall Street rebounds.© Reuters. Gold dips on profit-taking as Wall Street rebounds.

Investing.com – Gold eased Friday on light profit-taking, a day after achieving its biggest one-day rally in two years. But support remained solid above the $1,200 level from safe-haven demand triggered by the recent weakness on Wall Street and spike in Treasury yields.

“My 35 years on the floor have seen all this before,” George Gero, analyst at the RBC Wealth Management in New York, said, referring to gold’s ability to stay above the $1,200 level despite a series of rate hikes planned by the U.S. Federal Reserve.

“Traders will look for headlines, both political and economic, for further moves as technically we need $1,235-$1,250 prices for calls to be active, or $1,180 or lower for puts to be active at next options expiration,” Gero added.

Both spot and futures prices of bullion , hitting two-month highs and gaining the most since June 2016, as slowing global growth and trade tensions combined to drive more investors away from risk.

But the snap back on Wall Street and globally on bargain hunting, as well as cashing out by some gold investors after this week’s gains, brought bullion off its highs. A stronger dollar also weighed on gold.

for December delivery settled down 0.5%, or $5.60, at $1,222 a troy ounce on the COMEX division of the New York Mercantile Exchange. For the week, the contract was up 1.7% for its largest weekly advance in almost two months.

The , which measures the greenback’s strength against a basket of six major currencies, increased by 0.26% to 94.94.

In other precious metals trading on COMEX, rose 0.1% to $14.62 a troy ounce, decreased 0.64% to $841.20 and fell 1.32% to $1,061 an ounce.

Among base metals, COMEX futures rose 0.11% to $2.806 a pound.

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Source: Investing.com