LONDON, Dec 6: Gold fell further below the key $800 mark on Thursday, weighed by softer oil prices and a rising dollar that dulled the metal’s allure for non-US investors.

The market was seen focusing on key interest rate decisions from the Bank of England and the European Central Bank, with any cut or hint of a cut in rates seen boosting the US currency and denting dollar-priced gold.

Spot gold fell to $786.80/787.65 an ounce by 1122 GMT, from $795.50/796.20 late in New York on Wednesday, when it dropped more than $8 below $800, a psychological support.

Analysts were downbeat on the short-term price, citing dollar gains, predicting a continued drop towards levels last seen in mid-November at $773 per ounce.

It looks like we might test the lows we have already seen like $777 or $773 ... overall it looks like it’s going to head lower for the time being, Wolfgang Wresniok-Rossback, analyst at Heraeus Precious Metals, said.

The dollar struck a one-month high against a basket of currencies on Thursday, dragging the euro down to a three-week low and pulling investors in Europe away from dollar-priced bullion.

Oil prices fell further after sliding nearly $2 a barrel in the previous two sessions despite Opec’s decision to keep output levels unchanged.

US crude oil fell to $86.45 a barrel, its lowest level since Oct. 24, dampening gold’s role as a hedge against oil-led inflation.

In other bullion markets, the most-active February gold contract on the COMEX division of the New York Mercantile Exchange fell $12.30 to $791.40 in electronic trade.

The benchmark gold futures contract for October 2008 delivery on the Tokyo Commodity Exchange finished at 2,856 yen a gram, down 30 yen or 1 per cent from the previous close.

We expect new positive momentum on the gold market again after the expected interest rate cut on 11 December at the latest, the bank added.

Spot platinum fell to $1,457/1,460 an ounce from $1,465/1,469 late in New York after being supported earlier this week by a one-day strike by miners in main producer South Africa.—Reuters