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Gold up for the Week, but Down for the Day

Gold dips on day, but notches third weekly gain. - Gold prices settled a touch lower on Friday on profit-taking from recent gains, but a weaker dollar and geopolitical worries still helped bullion coast to a third weekly gain.

Based on current sentiment, market bulls appeared on track with their aim to take out the $1,250 resistance by next week, traders said.

In Friday's trade, the the dollar index fell 0.3%, helping gold run up initially as a contrarian bet. An early drop of the Dow also boosted gold in early trade before stocks on Wall Street rebounded.

Going into next week, Saudi Arabia's deepening political crisis with the West over the alleged murder of a missing journalist and Italy's budget woes should support bullion's safe-haven appeal, analysts said.

The “tremendous amount of headlines all over the cable business news channels, from geopolitical headlines to continued equity market weakness and inflation concerns … should attract new investors into gold and Treasuries as a safe haven and an alternative to equities at this time,” said Walter Pehowich, executive vice-president at Dillion Gage Metals in Addison, Texas.

“With the economy still operating on all cylinders, no one expects a total rotation out of equities, but there is a growing concern from traders that the results of the midterm elections could derail anything the president has in mind to keep the economy going at strong pace we see today,” he added.

U.S. midterm elections are on Nov. 6.

U.S. gold futures' most-active December contract settled down $1.40, or 0.1%, at $1,228.70 per ounce on the COMEX division of the New York Mercantile Exchange. For the week it was up $10.70, or 0.9%, after hitting a near three-month high of $1,236.90 on Monday.

Holdings of the SPDR Gold Trust (GLD), the largest gold-backed ETF havegained 2.5% in the past two weeks.

In other precious metals trading on COMEX, platinum rose 0.5% to $835.50 per ounce.

Palladium gained 0.6% to $1,071 per ounce. Silver was up 0.3% at $14.65.

Among base metals, COMEX copper rose 1.2% to $2.78 per pound.

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