He was last seen on Old Taupo Rd and after reviewing CCTV footage police believe he made his way south.
Overnight Rotorua's Search and Rescue Squad sent a drone out over the area near Te Puia and Waipa.
"We saw objects of interest around that area," Frederickson said.
Police also received news in the last few days of a credible sighting of Peterson near the Hemo Gorge intersection last Friday evening.
Frederickson said although the Search and Rescue team had grave concerns for Peterson, they were not giving up yet.
"There is still hope that he is alive and well and we are still looking for heat signatures, so that shows where our thinking is at, at this point."
Using the heat sensitive drone has come with the added difficulty of the warm weather and geothermal location.
Frederickson said he hoped Peterson had found access to water.
"If he hasn't had water, then there are some concerns."
When the search resumes it will move into the forestry land around Waipa.
"When there is a positive sighting, that gives us a logical next step," Frederickson said.
Frederickson said the public could still help.
"Search your back garden, keep an eye out when you're in public areas and report anything that you see as suspicious, anything that could relate."
Peterson is slim and of medium height. He was believed to have been wearing a green T-shirt, light brown pants, brown sneakers, and possibly a denim jacket.
His sister Michelle said earlier this week that he would likely be wringing his hands and could be talking to himself.
"Nigel walked with quite an unusual gait and leaned to the side a bit as he moved," she said.
Frederickson said the family remained positive and had a massive amount of support.
"It's really hard at the end of the day, to tell them we still haven't found anything."
