LONDON, May 13: Gold slipped on Tuesday and was likely to trade in a range as the dollar firmed against other currencies, robbing the metal some of its appeal as an alternative investment.

In other precious metals, platinum dropped more than 2 per cent after rising to its highest level in almost two months on Monday on speculative buying following the launch of US platinum exchange-traded notes.

Spot gold fell to $876.25/877.25 an ounce from $884.60/886.00 late in New York, after earlier hitting an intraday low of $874.75 an ounce.

We’re stilll looking for more sideways action. Basically, there is physical demand that’s returned to the market below $900 and that gives us some modest support, said David Holmes, director of metals sales at Dresdner Kleinwort.

Also, we did see some institutional investor interest as we dipped to the $850 level last week. On the upside, there just seems to be more caution and it’s more of a stretch for the market to get to $900 right now.

The most active June gold futures contract on the COMEX division of the New York Mercantile Exchange fell $7.9 to $877.0 an ounce.

Gold has struggled to recapture $900 as speculators booked profits since pushing up prices to a lifetime high of $1,030.80 an ounce on March 17 on record high oil, which raised its appeal as a hedge against inflation, and a struggling dollar.

But on the downside, a move below $870 should bring us much lower. Perhaps we may see $845 level again, said Koh, referring to a four-month low hit in early May.

Crude oil lost 58 cents to $123.65 a barrel after falling as low as $123.10. On Monday, it hit a record $126.40.

The dollar jumped against a basket of currencies but gains were capped by the risk that US retail sales data due at 1230 GMT on Tuesday may cloud expectations for a pause in the US rate cut cycle.

Spot platinum fell to $2,053/2,073 an ounce from $2,099/2,119 late in New York on Monday, when it rose as high as $2,103 an ounce -- its best level since March 17.

I think platinum faces strong resistance around the $2,100 to $2,120 regions. It’s going to need some really bullish news to move above those regions, said Koh of Philip Futures.—Reuters