Gold Falls Below $800 for First Time this Year

Gold fell more than 3 percent, extending losses it posted in Asia, as a strengthening dollar and fears over weakening global growth led to a sell-off in precious metals.

The metal slipped below $800 an ounce for the first time since December 2007 as a stronger dollar and weak oil prices robbed the metal of its appeal as an alternative investment.

Silver was the biggest casualty, dropping more than 12 percent in Asia, and leading gold, platinum and palladium lower.

Spot gold was at $785.60/786.60 an ounce, against $811.25/812.25 late in New York on Thursday.

"I am not surprised to see a breakthrough of $800 now, and I guess what's coming into play now is more technical selling below $800," said Darren Heathcote of Investec Australia in Sydney.

"We'll have some people targeting $750, but I think we would need to see a continuation in that dollar strength to give it sufficient momentum to head that way," he said.

U.S. crude oil futures slid below $114 a barrel on Friday on concern about the slowing global economy and hopes that a Georgia-Russia ceasefire would hold.

The most active Tokyo gold futures contract sank by its daily limit of 150 yen on Friday following a drop in oil and weak cash prices.

The benchmark contract for June 2009 delivery on the Tokyo Commodity Exchange fell to 2,813 yen per gram -- its weakest since late November.