LONDON, Nov 22: Gold held above $800 an ounce on Thursday, with investors enticed by the prospect of the dollar weakening further as markets increase pressure for a US. Federal Reserve rate cut next month. Trade was expected to be thin, however, with many players reluctant to take major bets due to US market closure for Thanksgiving Day and a national holiday in Japan on Friday.

Spot gold firmed to $803.05/803.65 per troy ounce from $799.80/800.50 late in New York on Wednesday.

The dollar hit a record low versus the euro, Swiss franc and a basket of major currencies as the market upped the ante on the Federal Reserve to deliver a interest rate cut next month.

A cut in US borrowing costs is seen heaping downward pressure on the embattled dollar as it dents the currency’s yield appeal, making gold cheaper for non-US buyers. Bullion’s safe-haven properties were also highlighted by worries over economic growth stemming from the global credit market crisis.

Even when good news comes out from the US, no-one really takes much notice of it -- a rate cut is like sticking a finger in a dam, Commerzbank precious metals trader Rory McVeigh said.

The weaker dollar is still keeping prices high for now -- there’s no sign of the euro dipping below the $1.48 level. Technical charts indicated gold was moving away from oversold territory, back on track towards a 28-year high of $845.40 hit on Nov 7.

In other bullion markets, the benchmark October 2008 gold futures on the Tokyo Commodity Exchange rose 10 yen per gram, or 0.4 per cent, to finish at 2,846 yen, after wavering between 2,814 yen and 2,852 yen.

The December COMEX gold futures contract was up $5 at $803.60 in electronic trade.

Gold demand for jewellery and investment jumped in India, China and other Asian countries in the third quarter of 2007 despite high prices, driven by strong economic growth and firm local currencies.

In other precious metals, silver held firm in line with gold at $14.50/14.54 an ounce compared with $14.47/14.51 late in New York on Wednesday.

Platinum stood at $1,466/1,471 an ounce from $1,461/1,465 an ounce on Wednesday, staying close to a record $1,484 seen earlier this month.—Reuters