NEW YORK (Kitco News) -- Gold futures ended near steady on Tuesday, after their best finish since mid-June. The metal ended the U.S. day session with some mild profit-taking pressure and some technical chart consolidation.
This comes following Monday's strong rocket rally that pushed gold prices to an eight-month high just above $1,200 an ounce. April Comex gold rose 70 cents, or less than 0.1%, to settle at $1,198.60 an ounce.
"It's natural that a market like gold, with a $40 dollar up move, have a bit of a pullback," said Phil Streible, senior market strategist for Chicago-based RJO Futures. "The correction today is nothing substantial at all," he added.
The yellow metal spent much of Tuesday trading lower after prices rose 3.5% on Monday. But, in late afternoon trading, the metal managed to turn things around, as sharp losses in U.S. equities gave the metal enough momentum to bounce back. This brings gold's tally to a total gain of more than 6% in five sessions.
Speaking with Kitco News, Streible said that $1,200 is a key resistance level; many traders will look to book profits at that level, "thinking it will take two to three times, to test that level before breaking through," he explained. Streible added that if gold manages to break through $1,228, then "sky's the limit" for the metal, with a possible $1,250 - $1,300 scenario.
Market watchers are now looking forward to Federal Reserve Chair Janet Yellen's testimony on the economy before the U.S. Congress on Wednesday and Thursday.
"I think that the Fed chair testimony will be a little more dovish, so that should be supportive for the gold market. If [investors] see that kind of softer tone, you will see fresh buys coming in. If they are hawkish, we may see that pullback extend itself," Streible explained.