LONDON (Reuters) - Gold was little changed on Tuesday around $1,105 an ounce due to low investor liquidity but dollar weakness and expectations of stronger buying in the new year were set to support bullion prices.
Spot gold was at $1,105.60 an ounce by 12:09 p.m., versus $1,105.60 an ounce late in New York on Monday. Bullion tumbled to a seven-week low of $1,074.10 an ounce last week before the holiday break.
"It is more likely that gold could go higher because the euro is recovering," Deutsche Bank trader Michael Blumenroth said. "People would rather be happy to see gold moving higher at the end of year rather than lower."
The dollar fell against the euro on Tuesday as equities gained ground due to improved investor appetite for risk.
Weakness in the U.S. dollar boosts gold's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
"It feels like $1,100 is well supported for the time being on the upside. I would say $1,110 seems to be a good resistance," Afshin Nabavi, head of trading with MKS Finance, said.
Traders and analysts said they were awaiting key U.S. consumer confidence data due to be released at 1500 GMT (3:00 p.m. British time) on Tuesday.
U.S. gold futures for February delivery were down 0.32 percent at $1,104.30 from $1,107.90 an ounce on the COMEX division of the New York Mercantile Exchange on Monday. Futures rose to a record high of $1,227.50 on December 3.
Nabavi said good physical demand for gold was also helping.
"That is one of the reasons why gold is being supported every time it goes lower," he said. "So if it continues in this manner, I think probably beginning of next year we should have a move on the upside."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,132.708 tonnes as of December 28, unchanged since December 21. Holdings hit a record high of 1,134.03 tonnes on June 1.
"Profit taking is giving way to new optimism and with the dollar weakening that's helping gold higher off a solid platform," John Meyer, analyst with U.K. based investment bank Fairfax, said.
Among other precious metals, spot silver was bid at $17.40 an ounce against $17.50.
The U.S. Securities and Exchange Commission took a regulatory step on December 22 that brought shares of ETF Securities Platinum and Palladium trusts closer to final approval for trade on the New York Stock Exchange.
The move has helped buoy platinum and palladium prices. Earlier on Tuesday palladium rose to its highest level since December 3.
Platinum was at $1,467.50 ounce against $1,479.00, while palladium was at $385.00 against $387.50.
(Additional reporting by Chikako Mogi in Tokyo; editing by Sue Thomas)
