Gold futures decline on profit-taking

Investing.com - Gold futures tumbled during European early afternoon trading hours on Friday, as investors locked in profits after the rally in the precious metal's price due to the Federal Reserve announcement that it will not begin tapering its bond purchases this year.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,367.40 a troy ounce during European afternoon hours, down 1.23%.

The December contract settled 4.72% higher at USD1,369.30 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,320.50 a troy ounce, the low from September 12 and resistance at USD1,387.10 a troy ounce, the high from September 10.

Gold prices rallied after the Fed on Wednesday held back from reducing the USD85 billion pace of its monthly asset purchases.

Fed Chairman Ben Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."

Separately, safe haven demand remained supported as U.S. Republicans and Democrats were forced to quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling.

If President Barack Obama's administration and Republicans do not come to an agreement to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default.

Elsewhere on the Comex, silver for December delivery declined 2.64% to trade at USD22.670 a troy ounce, while copper for December delivery slid 0.59% to trade at USD3.327 a pound.