Gold Steady in Last Few Days of 2011

Gold prices held steady on Tuesday, lingering around $1,600 an ounce, as investors remained cautious on the fate of the eurozone debt crisis a few days before a tumultuous year wraps up.

Spot gold fell 0.1 per cent to $1,603.29 an ounce by 0032 GMT. U.S. gold was likewise little changed at $1,605.20.

"Although gold outlook remains supported in the medium to long term by central banks' gold buying, among other factors, risks such as rising bond yields in Italy will send more safe haven flow to the dollar and pressure gold," Li Ning, from Shanghai CIFCO Futures, told Reuters News.

Gold prices may also fall under pressure from a strengthening dollar in the next few months as the brightened economic prospects in the United States are likely to further boost the dollar index, the analyst added.

Recent positive U.S. economic data encouraged riskier assets including equities and industrial metals to rally, sending gold prices up half a percent last week.

Meanwhile, the euro remained unchanged against the dollar on Tuesday, staying above an 11-month low as investors awaited an Italian debt auction later in the week.