Gold Tumbles on Profit Taking

CHICAGO, Feb. 27 -- Gold futures on the COMEX Division of the New York Mercantile Exchange on Friday dropped for the first time in four trading days, as investors cashed in their profits after the metal hit 3-month high.

The most active gold contract for April delivery shed 9.9 dollars, or 0.6 percent, to 1,776.4 dollars per ounce. However, gold has gained 2.8 percent this week

Market analysts said that sharp gains from earlier this week based on economic optimism and a Greek bailout deal prompted investors to take profits, pushing gold to close lower in the day.

News that Europe approved a rescue package for Greece to avert an imminent default lifted gold, euro as well as other riskier assets. Gold has hiked for three trading days this week and on Thursday even settled at the highest level since Nov. 11, 2011.

An analyst from LGT Capital Management said that it is not in favorite position to go long gold at these high levels, so "the potential for disappointment, and price consolidation, is a given."

Silver for March delivery fell 21.8 dollars, or 0.6 percent, to 35.338 dollars per ounce.