Gold fell to a three-month low on Thursday as prices were weighed down by a firm dollar, while investors remained cautious ahead of an important Italian bond auction later in the day. Spot gold dropped 0.7 percent to a three-month low of $1,543.79 an ounce, before recovering to $1,547.80 by 0731 GMT. It was headed for a more than 11 percent decline in December - biggest monthly loss in more than three years.
US gold fell as much as 1.2 percent to a three-month low of $1,545, and trimmed some losses to $1,549.70.