* Spot gold on track for biggest weekly gain in seven
* Could extend gains to $1,237/oz -technicals
* Palladium off eight-month highs hit on Thursday (Updates prices, adds comment.)By Sethuraman N RBENGALURU, Oct 12 (Reuters) - Gold fell on Friday,retreating from two-month highs hit in the previous session, asglobal equity markets recovered some poise after dramaticlosses.
Spot gold was down 0.4 percent at $1,219.38 an ounceby 1416 GMT, having jumped about 2.5 percent on Thursday as anequities sell-off steered investors towards safe-haven assets.Thursday's peak of $1,226.27 was the highest since July 31.U.S. gold futures were down 0.2 percent at $1,224.60an ounce.
Spot gold has risen about 1.5 percent this week, on trackfor its biggest weekly gain in seven weeks."Event-driven rallies usually don't last long," said GeorgeGero, managing director at RBC Wealth Management, adding that arebound in equities was one of the main factors weighing ongold."You still have headwinds coming from the U.S. FederalReserve rate hike and a possible rebound in the dollar. We needmore (ammunition) for gold to move further as it has been verywell abandoned with only a few central banks buying besides someretail buyers."Shares worldwide were set for their biggest daily gains innearly a month on Friday as European and Asian markets recoveredfrom a days-long sell-off that left them set for their worstweek since February. Despite gold's sharpest one-day percentage gain since June2016 on Thursday, the precious metal is still down about morethan 10 percent from its April peak, with investors buyingdollars as the U.S.-China trade war unfolds against a backdropof rising U.S. interest rates."We could see some bounces like this as the futures marketis extremely short," said Macquarie commodity strategist MatthewTurner. "But, ultimately, prices are going to drift down ... Thefundamentals for gold are still weak."Thursday's surge helped bullion break above the narrowtrading range it has been stuck in for the past 1-1/2 months.On the technical front, spot gold could extend gains to$1,237 an ounce, as suggested by a Fibonacci ratio analysis,said Reuters technical analyst Wang Tao. "Gold is trading fairly close to the 100-day moving averageat $1,228. There should be plenty of resistance, but a closeabove that level could signal a move higher," MKS PAMP Grouptraders said in a note.In other precious metals, palladium was up 0.2percent at $1,079, still shy of the previous session's peak of$1,096.80, its highest since Jan. 26.
Silver rose 0.6 percent to $14.64 and platinum was down 0.2 percent at $836.50.
(Reporting by Nallur Sethuraman in BengaluruEditing by David Goodman and Adrian Croft)