SINGAPORE, March 12 (Reuters) - Gold rose further on Monday as gains
on the Nikkei helped it offset pressure from a firm U.S. dollar, but some
investors were likely to stay on the sidelines ahead of a U.S. Federal Reserve
meeting this week, which could potentially weigh on the precious metal. 	
    Gold has risen more than 9 percent this year, building on 11 consecutive
years of increases, after the Federal Reserve said it would keep rates near zero
until at least 2014. But the Fed may have to reconsider any plans for additional
monetary easing when it meets on Tuesday if there are more signs the U.S.
economy is recovering. 	
    Spot gold was steady at $1,708.56 an ounce by 0248 GMT after rising
as high as $1,713.80. On Friday, gold rose nearly 1 percent on higher crude oil
and U.S. equities after U.S. employment grew solidly for a third straight month
in February --  beating expectations. [ID:nL2E8E93SW 	
    Bullion struck a record around $1,920 an ounce last September. 	
    "We will see more data coming out of the U.S., and whether or not there will
be a QE3," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong,
referring to a possible third bond-buying programme to lower interest rates. 	
    "If there's no QE3, then there will be disappointed-selling again.  	
If the dollar continues strengthening, then of course, gold will be under
pressure. There's a little bit of physical buying. Some people cover their
shorts after the weekend." 	
    U.S. April gold fell $2.20 an ounce to $1,709.30 an ounce.	
    Money managers, including hedge funds and other large speculators, cut their
bullish bets in gold to the lowest level in 5 weeks during the week of March 6,
as prices unwound from a late-February peak near $1,800 per ounce.
 	
    The Nikkei share average broke above 10,000 to a fresh seven-month high  	
on Monday, boosted by another U.S. jobs report that signalled a strengthening
U.S. economic recovery, while technical factors pointed to the index heading
higher. 	
    Gold often tracks equities because it is currently perceived as a risk
asset, especially during the financial turmoil in Europe, where some investors
will cash in the metal to cover losses in other markets. 	
    "Gold looks to have recovered from last week's technical dip, but remains
vulnerable to correction within a broadly positive longer term trend. There is a
risk we may see renewed downside pressure on bullion as we move towards the end
of the quarter," ANZ said in a note. 	
    "In the third and fourth quarters of last year hedge fund selling in the
final two-three weeks of the quarter weighed on the market. Improving equity
markets in the first quarter of 2012 may mitigate that and we are fairly
comfortable with our end-quarter forecast of $1,720." 	
    Among currencies, the dollar held around three-week highs against a basket
of major currencies on Monday after better-than-expected U.S. job data scaled
back expectations for more easing ahead of the Fed meeting. 	
    The euro hardly moved after suffering what traders called a
buy-the-rumour-sell-the-fact fall on Greece's bond swap deal with private
creditors which will clear the way for a new bailout.  	
    Greece's successful debt restructuring brought some relief to riskier assets
on Friday, but poor euro zone growth prospects and fears Portugal may also
impose losses on creditors were likely to limit the fall in yields on weaker
sovereign bonds. 	
        	
  Precious metals prices 0248 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1708.56    0.53   +0.03      9.26
  Spot Silver        34.03   -0.12   -0.35     22.90
  Spot Platinum    1680.49    3.43   +0.20     20.64
  Spot Palladium    700.47    8.47   +1.22      7.35
  COMEX GOLD APR2  1709.30   -2.20   -0.13      9.09         9513
  COMEX SILVER MAY2  34.07   -0.15   -0.43     22.03         1339
  Euro/Dollar       1.3094
  Dollar/Yen         82.14
 

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