Gold price retakes $1,200

After relatively quiet trading following last Friday's wild ride, the gold market managed to consolidate gains today, ending above the psychologically important $1,200 an ounce level.

In late afternoon trade on the Comex division of the New York Mercantile Exchange gold for December delivery was changing hands for $1,201.50 an ounce, up $10.60 or nearly 1% from Thursday's close.

The metal opened strong reaching $1,208 an ounce an hour into the session, but then two massive sell trades just before noon of some 1.3m ounces were executed five minutes apart.

That dropped the price down to the day low of $1,186 an ounce, but after steady gains throughout the afternoon gold topped $1,200 again at the close. Gold is up 6% since touching a four-year low on two weeks ago.

Trading volumes were robust with the most active contract trading the equivalent of 19.2 million ounces.

In contrast to the usual pattern, metals, oil, equities and the US dollar all strengthened on the day.

The positive momentum on US markets came after China announced a surprise rate cut and the European Central Bank started buying asset-backed securities to expand its program to stoke inflation and revive the bloc's weak economy.