Gold prices are likely to fall below $1,000 per troy ounce next year in view due to the strengthening of the US dollar and further interest rate hikes by the US Federal Reserve in 2016, suggest analysts.

"As the US dollar strengthens and interest rates in the US go higher, I think gold is going to lose some of its shine. We see prices heading towards the $1,000-per-ounce mark or even lower than that in 2016," said Vasun Menon, vice-president of Wealth Management at OCBC Bank.

Another analyst is equally convinced about the yellow metal's fall.

Gold was trading at $1,073 on early Thursday, 24 December, after having plunged to a six-year low of $1,049 on 17 December, a day after the US Federal Reserve announced its decision to raise interest rate by 25 basis points, according to a Channel News Asia report.

"We are fairly constructive on the US dollar given that the rate cycle in the US is quite the opposite of the rate cycle in the rest of the world. That's going to put downward pressure on gold prices and a break below $1,000 is potentially in store," said Seamus Donoghue, CEO of Allocated Bullion Solutions.

With China, the world's largest consumer of gold, projected to grow at 6.3% in 2016 as against 6.8% this year, the low-demand-induced fall in gold prices is also seen as another factor by analysts.

Buying on account of falling prices by India, the second-largest consumer of the precious metal, may not be enough to compensate the twin effects of the strengthening US dollar and weakening Chinese economy.

If gold falls below $1,000 and settles around $985 by the end of 2016, as expected by Phillip Futures, the metal would have touched a new low since 2009, said the Channel News Asia report.

Gold demand in India during the quarter ended September 2015 was 268.1 tonnes, up 12.55% from 238.2 tonne in the corresponding period last year, according to the World Gold Council. 

China's gold demand in the third quarter ended September 2015 was 239.9 tonnes, lower than India. China's five-year average was 242.3 tonnes, as against India's average of 228.2 tonnes.

India's gold imports declined 36.48% to $3.53 billion last month, as against $5.57 billion in November 2014.

Gold closed at Rs 26,149 per 10 gm in Delhi on Thursday, up 1.45% from Rs 25,775.40 on Wednesday.