Spot gold was down at 887.90/888.95 an ounce by 1117 GMT from $890.75/891.95 late in New York on Wednesday, when it jumped nearly $7 on a falling dollar and higher oil prices.
Earlier on Thursday the precious metal hit $895.05 an ounce, its highest since June 9.
"It is mostly the dollar and oil," said Mitsubishi Corp analyst Tom Kendall. "We had a little run up (yesterday) mostly on the back of crude."
Another analyst said a couple of banks were selling.
"Disappointed longs perhaps," he said, adding that gold prices are likely to trade in a range of $885-$900.
A firm U.S. currency makes metals priced in dollars expensive for holders of other currencies, while gold is seen as a store of value during times of inflation, which is threatening to turn into a spiral.
The dollar rallied broadly on Thursday, benefitting as the Swiss National Bank's decision to keep its interest rates on hold stalled the Swiss franc's overnight advance.
Gold has climbed this week on a weaker dollar.
"Gold prices have been able to rally recently in large part because the U.S. Federal Reserve and European Central Bank softened their anti-inflation rhetoric," HSBC said in a note.
"Thus reducing the prospect of imminent monetary policy tightening and allowing financial markets to re-evaluate the chances of a U.S. rate rise."
Gold hit a record of $1,030.80 on March 17 before a broad sell-off in commodities dragged down prices.
Oil steadied on Thursday, supported by a further production outage in Nigeria and as a top U.S. investment bank raised its oil price forecast. U.S. crude was down 1.07 cents to $135.61 a barrel.
Platinum was off intraday highs but underpinned by supply worries after South Africa's power regulator approved an additional 13.3 percent tariff rise for state-owned power firm Eskom on Wednesday."Platinum we think has the strongest fundamentals within the precious metals complex, especially now as we've entered peak demand period for power in South Africa," said Suki Cooper, analyst at Barclays Capital.
"Power problems in South Africa haven't been resolved and that will keep the market on tenterhooks."
Spot platinum was down at $2,048.50/2,068.50 an ounce from $2,080.50/2,100.50 on Wednesday. It rallied to $2,103.50 an ounce on Wednesday, its highest since May 28.
A power shortage in South Africa, the world's top producer of the metal used in autocatalytic converters, sparked worries about a supply deficit and propelled prices to an all time high of $2,290 in early March.
Spot palladium fell to $462.50/470.00 an ounce from $466.00/474.00 on Wednesday. Silver gained to $17.23/17.30 an ounce from $17.05/17.13.