Gold prices fell Thursday as investors facing margin calls sold the yellow metal to raise cash while others booked profits.

Momentum trading driven by technical triggers since Wednesday morning has driven continued downward pressure on the precious metals, Miguel Perez-Santalla, vice president at Heraeus Precious Metals Management, told Reuters.

The fact that LCH Clearnet raised margins on the Italian bonds may have caused liquidation of other assets to meet margin demands.

Without another daily dose of frightening news about Europe's sovereign debt crisis, the market mustered enough daring to step back, albeit cautiously, into equities. Germany's DAX index of large stocks finished up 0.66 percent, while Britain's FTSE 100 closed down 0.28 percent and France's CAC 40 settled lower by 0.34 percent.

Although gold briefly fell to $1,736.60, it found support above the key $1,750 level on safe-haven buying, signaling that another run at $1,800 may be at hand, traders said.

The dollar was down 0.47 percent against a basket of major currencies while the euro was up 0.6 percent against the greenback.

In mid-afternoon trading, the Dow Jones Industrial Average was up more than one percent, while both the Nasdaq Composite and the S&P 500 were also up.

Gold for December delivery fell $32 to settle on the Comex at $1,759.60 - a 1.79 percent decline -- while spot gold fell $4.40 to $1,762.13.

Silver for December delivery slipped 25 cents to $34.11, while spot silver rose 24 cents to $34.14.

Shares of gold mining companies and gold-related assets were holding their value better than bullion: The NYSE ARCA Gold Bugs Index was off about 0.2 percent. And the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund was off 0.56 percent.