Gold languished near its lowest level since April 2010 on Thursday as investors dumped the safe-haven metal amid strength in the dollar and equities, with markets now fearing $1,000 an ounce as the next target level.
Silver, under pressure from the dollar and sliding gold, was trading close to its lowest since February 2010 after losing 4 percent in the previous session.
FUNDAMENTALS
Spot gold was firm at $1,143.20 an ounce by 0048 GMT. It tumbled over 2 percent to $1,137.40 on Wednesday, following a sharp sell-off after breaking through key levels at $1,160 and $1,150.
The sell-off in gold began last Friday, when the metal broke through $1,180 - the lowest level gold had fallen to during last year's 28 percent plunge.
Since then, the strength in the dollar and breaks below key technical levels have built the case against gold.
Technical analysts have said a test of the $1,000 level could be on the cards following a break of support at $1,150 an ounce, a key retracement level.
Traders are keenly awaiting the U.S. nonfarm payrolls report on Friday, which they think could turn out to be another key trigger for gold. A strong report could boost the dollar and dull bullion's safe-haven appeal.
The yellow metal also took down other precious metals along with it. Silver slid to 4-1/2 year lows of $15.13 an ounce on Wednesday, while platinum and palladium fell to October lows.
The dollar rose to a four year high against a basket of major currencies on Wednesday, after Republicans won control over both chambers of the U.S. Congress for the first time since 2006, lifting investor expectations for more pro-business policies.
Weakness in the euro as investors awaited the European Central Bank's policy meeting, and last week's surprise move by the Bank of Japan to expand its stimulus measures have also provided a boost to the greenback.
Elsewhere, Russia's Central Bank First Deputy Governor Ksenia Yudayeva said on Wednesday that the bank could use gold from its reserves to pay for imports if the need arises.
A tumble in silver prices to four-year lows has triggered a global scramble by consumers to purchase silver coins and bars as the metal has reached its cheapest level relative to gold in more than five years.
The U.S. Mint said on Wednesday it has temporarily sold out of its American Eagle silver bullion coins following "tremendous" demand in the past several weeks.
