* Spot gold falls to one-week low of $1,591.09/oz
* Coming up: U.S. Dec consumer confidence; 1500
SHANGHAI/LONDON, Dec 27 Gold fell on
Tuesday but remained range-bound around $1,600 as investors
stayed on the sidelines in the final week of the year, subdued
by concerns about the euro zone debt crisis.
Recent U.S. economic data had spurred a rally in riskier
assets including equities and industrial metals and sent gold
prices up about half a percent last week.
Investors will look for more signs of recovery in the United
States from data this week, including consumer confidence for
December due later on Tuesday.
"Gold prices may be 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," said Li Ning, an analyst at Shanghai CIFCO
The dollar was down against a basket of currencies
on Tuesday but was still on course for a second straight quarter
of gains as fears about the worsening euro zone crisis drove
investors to seek safety in the greenback.
Spot gold fell to a one-week low of $1,591.09 earlier
and recovered slightly to $1,596.15 by 1414 GMT, down 0.6
percent. U.S. gold dropped 0.5 percent to $1,597.70.
In the week to Dec. 20, silver and gold speculators cut
their bullish bets for the third consecutive week, with silver
net long positions down by more than half, the U.S. Commodity
Futures Trading Commission said.
Market participants are also watching Italy's last bond
auctions of the year later this week after the 10-year Italian
bond yield broke above 7 percent, seen as an
unsustainably high level.
"Although gold's 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," said Li of Shanghai
Prospects of slower global growth have led some central
banks to loosen their monetary policies. The launch of
quantitative easing by the U.S. Federal Reserve or the European
Central Bank would provide support for commodities, including
gold, analysts have said.
The European Central Bank should launch a U.S.-style asset
purchase programme if economic conditions change, executive
board member Lorenzo Bini Smaghi said, opening the door to a
possible policy shift at the bank to combat deflation.
Holdings of the iShares Silver Trust SLV, the world's
biggest silver-backed exchange-traded fund, declined nearly 1
percent on the day to 9,605.79 tonnes by Dec. 23, the lowest
(Reporting by Rujun Shen,; additional reporting by Susan
Thomas, editing by Jane Baird)