NEW YORK (MarketWatch) -- Gold futures edged lower Monday on expectations that key data due this week might bring closer an eventual interest-rate hike in the U.S., curbing inflation expectations and reducing gold's investment appeal.
Several U.S. reports this week, including home sales, consumer spending and jobless claims, are expected to show the economic recovery is gaining steam. The third-quarter gross domestic product, which might be revised down slightly, is still expected to show the economy remains on the mend.
Meanwhile, the dollar erased its losses against the euro, weighing on dollar-denominated gold prices.
Gold for December delivery fell 0.4% to $1,106.40 an ounce on the Comex division of the New York Mercantile Exchange. The more actively traded February contract slid 0.5% to $1,106.50.
"The precious metals markets are likely to remain strongly influenced by movements in the dollar," said Carsten Fritsch, an analyst at Commerzbank, adding that $1,100 an ounce is a key level.
"Investors may see gold sliding to $1,000," he said. "The probable year-end gold price will be around US$1,050."
Gold futures fell below $1,100 an ounce Thursday for the first time since mid-November.
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Holdings in SPDR Gold Trust (GLD 107.93, -1.02, -0.94%) , the biggest gold exchange-traded funds, rose to 1,126.61 metric tons as of Friday, up 6.1 metric tons from a day ago.
In the week ahead, shortened by Friday's Christmas holiday, there's a rush of economic data that will be scrutinized for its implications for Fed rate policy. Much of the key releases come Tuesday and Wednesday. See Economic Calendar.
Economists are expecting the U.S. government has revised its estimate for real gross domestic product a tad lower, to 2.7% from a 2.8%.
They've forecast existing-home sales rebounded in November to a 6.25 million pace from 6.10 million. And they expect a survey of consumer sentiment edged higher to 74 from 73.4.
In other metals Monday, March silver lost 0.5% to $17.231 an ounce, January platinum was nearly flat at $1,430.50 an ounce, March palladium slid 0.2% to $367.20 an ounce. March copper rose 1.1% to $3.1725 a pound.
In currencies trading, the dollar was nearly flat against the euro, with the European currency trading at $1.4338. The dollar index (DXY 77.86, +0.09, +0.11%) was down 0.1% at 77.758.
In mining stocks, Bucyrus International Inc. (BUCY 56.14, +5.30, +10.43%) said it's going to buy the mining unit of Terex Corp. (TEX 20.26, +1.05, +5.47%) for $1.3 billion.
Alcoa Inc. (AA 15.88, +1.30, +8.92%) was upgraded to overweight from equal-weight by Morgan Stanley, which introduced a $22 price target.
