Gold futures dropped nearly 2 percent on Wednesday following gains in the dollar and lower oil prices causing traders to lose appeal for the metal.

Prior to today, gold had gained 29 percent this year. Gold for December delivery dropped $13.70, or nearly 2 percent, to end at $800.30 an ounce on the New York Mercantile Exchange.

You're seeing gold decline today off of some end-of-month profit-taking in gold, energies and across the board in commodities. A strong dollar seems to be pushing gold lower as well, said Zachary Oxman, a senior trader at Wisdom Financial, he wrote in a note to clients.

Most analysts remained confident of the metal's potential to contain losses below $800 due to expectations for further dollar losses as investors anticipated cuts in U.S. borrowing costs that would affect the dollar's yield appeal.

Given the still bearish outlook for the dollar and the scale of volatility in the equity markets we still expect dips to be viewed favorably, analyst James Moore of said in a note.

Since hitting a 28-year peak above $845 earlier this month on Nov 7, gold has failed to reach such levels again. However, analysts did not comment on whether another November peak will be possible in the near future. The highest recorded rate was $850 in January 1980.

Crude-oil futures dropped over 3 percent on Nymex. The Energy Department reported Wednesday that U.S. crude supplies fell by 400,000 barrels in the latest week and OPEC President Mohammed bin Dhaen al-Hamli said the cartel is ready to increase the supply of oil.