LONDON--Spot gold eased as the dollar strengthened ahead of some key U.S. economic data and the two-day Federal Open Market Committee's meeting.
The ongoing recovery in the dollar and year-end profit-taking could keep gold under pressure, possibly leading to a test of support at $1,100 a troy ounce, analysts said.
At 1052 GMT, spot gold was trading at $1,114.20 an ounce, down 1% on the day. The euro was at $1.4542 against the dollar, weakening from $1.4646 at 0000 GMT.
Thinning trading volumes because of the Christmas and New Year holidays were keeping gold range bound in European trading hours, said a trader in London.
The economic data Tuesday is heavy, with U.S. manufacturing data, producer price index, industrial production and consumer confidence figures. The FOMC begins Tuesday, with the interest-rate decision slated for Wednesday.
Commerzbank analyst Eugen Weinberg said strong U.S. economic data would likely strengthen the dollar, as has been the new trend of late. With the FOMC meeting only a day later, signs of a recovering U.S. economy could advance the market's expectations for monetary tightening.
"Should the data be good and the dollar strengthens, I think it will be dampening enthusiasm for gold," he said.
A break below of $1,100 per ounce is possible in such a scenario, especially as the declining trading volumes in gold will increase volatility, he added.
In other metals, spot silver was 1.2% lower at $17.15/oz. Spot platinum fell 0.8% to $1,433.5/oz and spot palladium was 2.2% lower at $356/oz.
