Gold looked set to post its third straight annual loss, undermined by a robust greenback and prospects of higher US interest rates.
Investors have sold off the metal, down about 10 per cent for last year, on fears that higher US interest rates would dent the appeal of non-interest-paying bullion.
Other precious metals have also been hit by the strength in the US dollar and slump in gold, and were headed for sharp annual declines.
Spot gold edged up 0.1 per cent to US$1,062.20 an ounce early yesterday. Volumes were thin ahead of today's New Year holiday.
It slid to a near-six-year low of US$1,045.85 earlier in December.
"Gold will be lower (this year) as US interest rates will keep going higher," said a Hong Kong bullion trader, adding that this will put pressure on other precious metals.
Gold could drop to US$1,000 or below but could recover slightly in the second half of the year, he said. The outlook for the metal does not look bullish heading into 2016.
Gold prices have been influenced a great deal by monetary policy in the United States. The Federal Reserve raised interest rates for the first time in nearly a decade in December, and is expected to hike rates at a gradual pace this year.
That could support the US dollar, which is on track to gain 9 per cent against a basket of major currencies. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Other fundamentals were also not supportive of an uptick in prices.