Gold futures slipped on Thursday as crude oil prices recovered and the dollar continued its recent rally which boosted demand for the precious metal.
Gold for February delivery rose $3.30 at $807 an ounce on the New York Mercantile Exchange. Earlier in the session, gold hit an intraday low of $793. On Wednesday, gold futures dropped $3.90 to finish at $803.70.
The dollar was mixed, while gaining on the yen but erasing gains against the euro and pound. Earlier, the Bank of England cut interest rates by 25 basis points and the European Central Bank held rates steady as was expected by analysts. Crude oil for January delivery erased earlier losses and was last up 73 cents at $88.22 a barrel.
With both oil and the dollar beginning to reverse their trends as year-end profit taking emerges, it looks as if gold will continue to see pockets of pressure, said James Moore, an analyst at TheBullionDesk.com, in research note.
However, we don't expect gold to drop significantly lower as scaled-down buying emerges from the physical sector, while the sensitivity in the credit/sub-prime issues continues to draw investment demand, he said.