Gold drops after two straight days of large gains
The precious metal plummeted more than $32 as news of a possible government bailout strengthened the Dow.
NEW YORK (CNNMoney.com) -- Gold rescinded Friday as Wall Street reacted to the news of a possible massive government bailout.
The precious metal's December delivery dropped over $32 from Thursday to settle at $864.70. This comes after two days of giant gains that, combined, equaled $116.50. Investors were looking for a safe haven as stocks reacted unfavorably to the weak financial sector.
The commodity is often used as a hedge against inflation and a safer bet in the wake of the financial crisis that has overtaken Wall Street.
But when investors heard Treasury Secretary Henry Paulson's announcement regarding a possible bailout in the works to stem the credit crisis, the Dow Jones industrial average jumped. The hope is the Treasury will buy illiquid mortgage assets that have clogged financial companies' balance sheets, at a discount. This sent the Dow flying over 450 points after the news. There's been a slight recoil, but it still stands over 350 points for the day. 
