Gold, silver take a Friday beating

The gold price on Friday dropped back below the psychologically important $1,400 an ounce level as profit takers make the most of the metal's recent run.

By mid- afternoon the yellow metal was trading at $1,396.80 on Comex in New York, down more than $16 from Thursday's close and well below a three-month intra-day high of $1,434 reached Wednesday.

Despite the pull-back on Friday – traditionally not a good day for the gold price as traders close out positions – gold is still up 5.7% in August.

Gold has also rallied 16.5% from the intra-day low of $1,182.60 an ounce hit on June 28.

Reuters quotes VTB Capital analyst Andrey Kryuchenkov as saying "the move higher in August was driven mostly by short-covering and opportunistic buying, which seems to have now run out of steam."

BullionVault spoke to David Govett at brokers Marex Spectron who said Syria was also playing a role in Friday's decline: "My feeling is that without Syria [the gold price] would be sub-1400. [But] with that simmering in the background, the majority [of traders] are nervous of being short."

Silver also succumbed to selling pressure Friday, with December futures down 2.5% or 62 cents to $23.53 an ounce.

Silver investors enjoyed a fantastic August with the volatile metal gaining 19.5% over the month, but this time last year silver was still trading above $30 an ounce.