Gold regained ground on Friday after the U.S. dollar bounced against the euro on expectations of further interest rates cuts, but the metal struggled to recapture $800 an ounce.

Gold hit a high of $836 an ounce and then slipped to $791, steady from $795 on this week. Gold dipped below the psychological level of $800 due to a rising dollar.

Buying interest from speculators and jewellers emerged at lower levels but dealers said there was still a possibility for gold to revisit a low of $772.60 hit on November 20, when stock market declines and investors' risk aversion sparked selling.

The easing of gold prices from near 28-year highs is tempting Indian gold buyers back to jewellery shops during the ongoing marriage season, after they kept their moneybags zipped during the peak Hindu festival period.

The euro rose as high as $1.4781 on trading platform EBS earlier but stayed off the record peak of $1.4968 touched late last week.

Federal Reserve Chairman Ben Bernanke said on Thursday a resurgence in financial strains in recent weeks had dimmed the outlook for the U.S. economy, signalling an openness to again lowering interest rates.

The Fed is seen trimming benchmark U.S. interest rates by a quarter percentage point to 4.25 percent next month after it cut them by a cumulative three-quarters of a percentage point since September to cushion the economy from a severe housing slump and credit market turbulence.

US crude oil had topped $96, but closed this week at $91. Ongoing speculation that oil cartel OPEC will increase production at a meeting in Abu Dhabi on 5 December also served to drag the black gold back from initial highs.