Gold dipped below an earlier two-month high on Friday as the dollar firmed, but the metal was still heading for its biggest weekly gain in a month as investors continued to cover short positions and on strong physical appetite from China.
Traders added that the crossing of a technical resistance level was also adding to buying, although the move upwards seen in the past week looked to have lost some momentum.
“After such a strong move up there is always the risk of a retracement… however after gold broke through its resistance at $1,350 last night things are looking somewhat more encouraging,” Heraeus trader Alexander Zumpfe said.
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