LONDON, Jan 29: Gold prices slipped another 1 per cent on Thursday, extending the losses of the two previous sessions, as the firmer dollar curbed buying of the precious metal as a currency hedge.

Spot gold slid to $878.10/880.10 an ounce from $885.60 in New York late on Wednesday. The precious metal has fallen 4 per cent this week from the more than three-month high of $915.30 it hit on Monday.

After a pretty impressive run last week we saw profit taking when gold failed to break through $920 an ounce, Commerzbank senior trader Michael Kempinski said.

Gold is also re-establishing its relationship with the dollar and oil after dissociating from its two main external drivers last week as risk aversion came to the fore, he said.

Weakness in gold demand from traditional centres of jewellery buying such as India, the Middle East and China is worrying traders, analysts said.

India’s gold imports plunged by more than 90 per cent to 1.2 tons in January, the Bombay Bullion Association said on Thursday, due to high prices and ample stocks.

Demand for gold has been buoyed by investment in bullion-backed products such as exchange-traded funds.

The world’s largest gold ETF, the SPDR Gold Trust, saw strong inflows last week that took it to record levels, but its holdings have been steady for the last three sessions.

On the supply side, the world’s number four gold miner, Gold Fields, said its output in the three months to December rose four per cent from the previous quarter, and predicted a further 14 per cent rise in the quarter to March.

Interest in gold as a safe haven is still expected to boost investment demand this year, keeping prices steady in the face of a global downturn that is expected to pressure other commodities.

Platinum eased to $951/959 an ounce from $953.50 and palladium was at $188.50/192.50 an ounce from $188.—Reuters