LONDON, Nov 30: Gold firmed in narrow ranges on Friday, struggling to recapture the key $800 mark and taking refuge from sharp swings in oil and currency markets. Spot gold rose marginally to $796.10/796.80 per ounce by 1130 GMT compared with $795.00/795.80 in New York on Thursday.

Prices have fallen almost 5 per cent this week since hitting a two-week high of $836.70 on Monday, reflecting heightened volatility as prices were pulled between volatile oil and a strengthening dollar.

One month implied gold volatility has roughly doubled since August to more than 20 per cent. The market has stalled twice so far in attempting to reach 28-year highs scored earlier this month at $845.40.

The dollar is stronger broadly and oil prices have fallen, that would suggest that gold prices could decline towards $750 near term. The positioning on the futures market is still pretty extreme, UBS metals analyst Robin Bhar said.

Today we could also get some window dressing as it’s month-end and year-end for some of the banks, pushing prices one way or the other to flatter performance, he added.

However, interest was emerging from speculators and jewellers at lower levels.

There will be buying interest at the lower end. But if we stay below $800, we’ll have the chance to visit the last low around $793, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

The easing of gold prices from near 28-year highs is tempting Indian gold buyers back to jewellery shops during the ongoing marriage season, after they kept their moneybags zipped during the peak Hindu festival period.

In other bullion markets, the COMEX February contract was trading down 40 cents an ounce at $801.90.

The benchmark October 2008 contract on the Tokyo Commodity Exchange closed 29 yen per gram lower at 2,850 yen.

Federal Reserve Chairman Ben Bernanke said on Thursday a resurgence in financial strains in recent weeks had dimmed the outlook for the US economy, signalling an openness to again lowering interest rates.—Reuters