Gold prices slid on Thursday in choppy trade, giving up overnight gains on a rise in the dollar versus the euro and easing oil prices that dented bullion's role as a hedge against inflation.
Spot gold stood at $802.00/802.80 per troy ounce by 6:30 a.m. EST compared with $814.20/815.00 late in New York on Wednesday, when it jumped 2 percent on a rebound in crude oil and a lower dollar.
Crude oil futures eased below $94 a barrel, while the dollar was up around a quarter percent versus the euro, making dollar-priced gold dearer for non U.S. investors.
Analysts said the market also took a knock from risk aversion in other asset classes that prompted trimming of investments in commodities, but support at $800 was still intact with bulls holding out for a run at last week's 28-year highs.
The market is still very much aligned to the dollar and now also the risk aversion story. Risk aversion is where gold ought to be strutting its stuff but that doesn't always work, SGCIB economist Stephen Briggs said.
One can never rule out talk about a return to $850, all you need is for the dollar to go to new lows, but right now that's unlikely to be the focus of the traders, he added.
Gold is traditionally seen as a safe-haven asset in times of financial stress but can get bundled in with commodities as an asset class to be sold when investors are feeling risk-averse.
Bullion rallied to $845.40 on November 7, its highest level since January 1980 when it hit a record high of $850.
In other bullion markets, the most-active December gold contract on the COMEX division of the New York Mercantile Exchange shed $11.40 to $803.30 per ounce.
The key gold futures contract for October 2008 delivery on the Tokyo Commodity Exchange ended 22 yen per gram higher at 2,934 yen.
Barrick Gold was upbeat on the outlook for prices earlier on Thursday, saying that prices could move quickly to $900 or $1,000 an ounce.
Dealers expected volatility to persist due to swings in oil and the dollar and continued jitters over financial market conditions due to the ongoing crisis in credit markets.
The probabilities of a major slide in gold would continue to remain as long as the recent high around $845 is not conquered back, said Pradeep Unni, an analyst at Vision Commodities in Dubai.
Global gold demand in the third quarter rose 19 percent year-on-year to 947.2 tonnes on the back of robust inflows into bullion investment funds and improved jewellery consumption, industry-sponsored World Gold Council (WGC) said.
In other precious metals, platinum mimicked falls in gold to $1,418/1,422 an ounce from $1,440/1,444 in late New York on Wednesday. Silver also tracked back to $14.74/14.79 an ounce versus $15.02/15.07 in New York.
Palladium eased to $365/369 an ounce from $369/374.
(Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Veronica Brown; Editing by Michael Roddy)