Gold slipped on Friday undermined by growing perceptions further stimulus measures from the United States were unlikely and by a higher dollar against the euro, which was under pressure from concern about the results of European bank stress tests. Spot gold was bid at $1,583.49 (Dh5,816) a troy ounce at 1310 GMT from $1,586.75 an ounce late in New York on Thursday when the precious metal hit a record high of $1,594.16. Gold recovered some losses after US annual core inflation, which excludes food and energy, for June rose to its highest level since January 2010. \"High core inflation... reduces the chances of more [US monetary easing] and should support the dollar,\" said Carsten Fritsch, commodity analyst at Commerzbank. Article continues below A higher dollar makes commodities priced in the US currency more expensive for holders of other currencies. Inflation hedge \"But people are looking at the other side of the coin and buying gold as an inflation hedge,\" Fritsch said. US Federal Reserve chairman Ben Bernanke said on Thursday the central bank is prepared to act if the recovery falters, but made clear the Fed was not at that point. \"We\'re of the view that the US doesn\'t need [further monetary easing], that US growth will accelerate and that QE3 won\'t be needed,\" said Dan Smith, analyst at Standard Chartered. Strong demand growth in Asia, high inflation in Asia and a dollar under pressure will support gold in the medium term.\" Gold is also used to protect investment portfolios against inflation, which could be fuelled by excess liquidity. The Fed\'s $600 billion bond purchase programme that ended in June — dubbed QE2 — pumped large amounts of cash into the global financial system, much of which found its way to commodities sparking a sharp price rally. \"The biggest risk to gold at current record prices is not just investors banking profits — as some did after Fed Chairman Bernanke poured a little cold water on QE3 expectations yesterday — but also the threat of a sizeable upswing in scrap supply,\" UBS said. Moderate sales \"For the past 12 months or more, scrap sales have been moderate, never reaching a level to significantly impact rising gold prices. But feedback from our refining contacts (last) week indicates that current scrap flow is noticeably above normal levels.\" The euro fell against the dollar as investors worried European bank stress tests may reveal things that could further sour sentiment towards the single currency. The European Banking Authority at 1600 GMT publishes results of its stress tests of 91 lenders along with measures to bolster capital for those that failed and for those that nearly failed. \"There\'s been some profit-taking, using the dollar, euro and stress tests as an excuse,\" a gold trader said. \"The market seems to be ignoring the chances of a US debt default.\" Ratings agency Standard & Poor\'s warned there is a one-in-two chance it could cut the US\'s prized AAA credit rating if a deal on raising the government\'s debt ceiling is not agreed soon. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York\'s SPDR Gold Trust and that of the largest silver-backed ETF, New York\'s iShares Silver Trust remained unchanged.