(Reuters) - Gold wallowed near a three-month low Thursday, remaining under pressure due to a firm dollar, while investors fretted over an important Italian bond auction later in the day.

FUNDAMENTALS

Spot gold edged down 0.3 percent to $1,550.90 an ounce by 0022 GMT, on course for an 11-percent decline in December. It hit a three-month low of $1,549.24 in the previous session.

U.S. gold fell 0.7 percent to $1,552.50.

The dollar index <.DXY> edged higher, after its surge in the previous session pushed down precious metals, as investors grew increasingly nervous over a Italian bond auction scheduled on Thursday, even after a strong sale of short-term bonds on Wednesday.

Spot silver dropped nearly 1 percent to a three-month low of $26.78, after prices fell more than 5 percent in the previous session.

Spot platinum fell to $1,369.75, its lowest in nearly two years, and recovered slightly to $1,370.99.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings were unchanged at 1,254.57 tons by Wednesday.

MARKET NEWS

U.S. stocks fell more than 1 percent on Wednesday after a hefty year-end rally and the S&P 500 erased gains for the year on renewed concerns about the euro zone's financial health.

The euro nursed heavy losses in Asia on Thursday, having suffered a sudden drop overnight as moves were amplified in poor year-end liquidity after stop-losses were triggered.

(Reporting by Rujun Shen; Editing by Himani Sarkar)