Gold prices are floating in the middle of the range trying to find some market direction.

Gold prices are struggling to hold gains Friday afternoon despite a sharp drop in U.S. equity markets.

It has been a volatile day for gold with a $20.68 swing in prices. In the European session, spot gold hit session highs at $967.17 an ounce. Then,higher stocks at the start of the North American session dragged prices to session lows at $946.57. The precious metal recovered some of its losses and is now trading around $957.

Although gold prices are underperforming, silver prices continue to move higher. Prices are trading near session highs at $13.86 an ounce. In the last two days prices have risen almost 10%.

Since the Fed announced its quantitative easing measures on Wednesday, gold has rallied almost $69 dollars and has broken through key resistance levels. Some commodity strategists have said the steps the Fed has taken provides some inflation risk, which will continue to support all the precious metals.

Investment demand for gold is still surging, SPDR, the largest physically backed ETP recorded inflows of 18.96 tonnes yesterday, bringing its total holdings to a fresh record high of 1103.29 tonnes, said commodity strategists from Barclays Capital.

Ashraf Laidi, chief market strategist from CMC Markets said he still sees further gains for gold. Looking at technical factors, he said that gold prices remain in a very strong uptrend, which suggests that prices could hit $1,050 by the end of the quarter.

In the mining sector, spot gold is trading down $3.83 to $956.03 USD. In Canadian dollars, gold is down $1.81 to C$1188.04. Silver contracts at the CBOT are up $0.31 to $13.82.

WTI Crude oil is down $0.75 to $51.29 while ICE crude oil is trading up $0.09 to $50.76.

Meanwhile, ICE RBOB gasoline futures are up $7.16 to $143.73 and Globex natural gas is down $0.01 to $1.35. Heating oil at the ICE is up $0.67 to $136.30.

Bloomberg's index for base metals is down 1.11 points to 122.53. Wheat futures at the CBOT are down $4.75 to $550.50.

All data take at 2:27 p.m. EDT

By Neils Christensen, neilsc@economicnews.ca, edited by Megan Ainscow, mainscow@economicnews.ca