LONDON, Oct 17 (Reuters) - Gold eased below $800 an ounce on Friday, extending the previous session's 5 percent price drop, as a firmer dollar pressured the metal.
Spot gold was quoted at $798.65/801.15 an ounce at 0951 GMT, down from $804.50 late in New York on Thursday. Prices tumbled in that session as funds liquidated gold holdings to cover losses on other markets.
Fresh strength in the dollar weighed on prices.
"The recent dollar strength has tended to weigh on gold pretty heavily," said Standard Chartered analyst Daniel Smith. "The dollar remains the underlying driver (of gold)."
Nonetheless, he said, the conflicting pressures on gold -- including firmer oil and investor deleveraging -- are likely to result in consolidation, rather than further large price moves.
"Gold is reasonably close to fair value at the moment," he said. "It looks like gold will trade sideways from here." Continued...
