U.S. gold futures fell on Wednesday spurred by volatile trading in stock markets on concerns of a global economic slowdown.

Gold futures for February delivery slipped $7.20, or 0.8 percent, to $883.10 an ounce on the Comex division of the New York Mercantile Exchange. The precious metal hit a new record of $916.10 on January 15. Gold has gained 4.9 percent this month.

Stocks in the U.S. and in Europe fell on Wednesday after European Central Bank President Jean-Claude Trichet hinted borrowing costs are not likely to be lowered any time soon. On Tuesday, the Federal Reserve announced an emergency interest-rate cut on mounting signs of a U.S. recession.

The fed cut marked the biggest reduction the central bank has made since it began using changes in rates as the key tool of monetary policy around 1990.

Short-term, rallies in gold may run into further pockets of profit taking. However, with interest rates in decline gold is likely to see further investor inflows as traders seek assets offering both safe haven qualities and strong returns, said James Moore at TheBullionDesk.com in a research note.

Meanwhile, U.S. equities fell for a sixth session. The Standard & Poor's 500 Index has fallen 12 percent this month, its worst-ever start to a year.

The near-term direction of gold prices would be largely determined by the market view on Tuesday's Fed rate cut and the likelihood of another cut at the Fed's scheduled meeting on Jan 29-30, said James Steel, metals analyst of HSBC in New York in a note to clients.

Also on the Nymex, Silver futures for March delivery fell 13.5 cents, or 0.8 percent, to $15.97 an ounce. Silver has increased 7 percent this month.