NEW YORK ( TheStreet) -- Gold prices were down in the dumps again on Thursday as investors continued to sell the yellow metal for riskier assets.

Gold for February delivery bounced off session lows but still shed $2 to $1,371.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,380 and as low as $1,364.30 during Thursday's session. Despite the price drama, gold was able to hold to its $1,370 support area.

The U.S. dollar index was adding 0.63% to $80.79 while the euro was losing 0.96% to $1.30 vs. the dollar. The spot gold price was down $7.30, according to Kitco's gold index.

Three times gold prices have tried to break to and sustain new highs but to no avail, with 2011's 3.4% correction continuing.

"The high volume distribution and failed breakouts into new highs is indicating institutional selling," says Jeb Handwerger, editor of Handwerger says a break below the 50-day moving average could trigger more sell orders, where traders are forced to sell to lock in profits, and prices could trend down to $1,275-$1,250.

Like other traders, Handwerger is holding long-term positions but selling the rest and will only buy gold again once the correction shakes out. Without this new money in the market, gold prices will have a tough time stabilizing.

Gold's downward trend started as profit-taking turned into technical selling and has now morphed into a return to risk appetite as better than expected data leaves safe have metals on the sidelines.

November manufacturing orders in Germany climbed 5.2% vs. a prior 1.9%. The jump blew past expectations. The news trumped weak retail sales in the eurozone for the same month as well as the U.K.'s weaker purchasing managers index for December, which slipped below the growth level of 50.

An improving jobs picture in the U.S. has also not helped gold. Initial jobless claims for the week ending Jan. 1 rose slightly to 409,000, but expectations are still high headed into Friday's jobs number. The unemployment rate is expected to slip slightly to 9.7% and where the private sector is expected to add anywhere from 225,000 to 162,000 jobs, according to

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