Spot gold slipped on Thursday under the weight of a rallying dollar, after falling more than 1 percent in the previous session when the U.S. Federal Reserve announced its plan to load up long-term securities and offered a grim economic outlook.

Warning of significant downside economic risks, the U.S. central bank said it would launch a $400 billion programme to shift its $2.85 trillion balance sheet more heavily towards longer-term debt.

The decision disappointed investors who had hoped for stronger stimulus measures, prompting a slide in stocks and commodity prices.

The worries about the euro zone's debt crisis continue to support the safe haven appeal of gold, but momentum is lacking for bullion to march towards its record high above $1,900.

For the short term, gold is likely to remain in the range of $1,750 and $1,850, said Ong Yi Ling, an analyst at Phillip Futures.

If we do see $1,700, that could potentially cause a greater correction to $1,500.

Spot gold lost 0.3 percent to $1,775.40 an ounce by 0609 GMT, extending a 1.2-percent decline in the previous session.

The most-active U.S. gold futures contract fell as much as 2 percent to $1,772.5, before recovering to $1,778.20.

Technical indicators bode ill for gold prices. Spot gold prices could fall towards $1,730 during the day, said Reuters market analyst Wang Tao.

The dollar index rose to a seven-month high as investors piled into the greenback, lured by the appeal of short-term rates on U.S. bonds after the Fed announcement.

A pricier dollar makes commodities denominated in the greenback more expensive to buy for holders of other currencies.

Investors are buying the dollar and selling gold, said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong.

But the physical supply is a bit tight, as Asian buyers stock up on physical gold.

Investors are shifting their attention to the Group of 20 talks, due to take place in Washington on Thursday and Friday, where Europe will be under heavy pressure to stem its deepening debt crisis.

Other precious metals also weakened amid a commodity-wide slide.

Spot palladium dropped to a 10-month low of $680.15, tracking a price drop in gold as well as industrial metals.

Spot platinum dipped to a six-week low $1,740.55, before recovering to $1,747.24.

China's factory sector contracted for a third consecutive month in September as flagging overseas demand put the brakes on new orders, HSBC's China Flash PMI data showed.

Slower growth in the world's top commodity consumer could add to pressure on prices of silver, platinum and palladium, which have wide industrial applications.