SINGAPORE, March 26 (Reuters) - Gold prices hit a one-week high
on Monday before paring gains to trade near the previous closing
price, with investors closely watching the oil and currency markets
for trading cues.	
    Bullion prices posted the biggest one-day rise so far this month
on Friday, reflecting higher oil prices and a sharp fall in the
dollar as a result of disappointing U.S. housing market data.
  	
    A short-squeeze pushed prices to $1,669.26 in the early hours,
but the pressure eased after the Shanghai Gold Exchange opened and
the discount in Shanghai prices prompted some selling on the London
market, traders said.	
    In the short term gold may remain under pressure from a 
brighter U.S. economic recovery, high real interest rates and
sluggish physical demand, they said. 	
    "There is no rush to buy gold," said Ronald Leung, a dealer at
Lee Cheong Gold Dealers in Hong Kong.	
    "We are seeing slower economic growth accompanied by easing
inflation in China, which dampens the interest in buying gold."	
    Prices below $1,650 may attract some buyers, albeit on a small
scale, he said.	
    Money managers in U.S. gold futures and options cut their
bullish bets for a third straight week to the weakest level in two
months as bullion prices tumbled after a strong run of U.S. economic
data triggered fund selling. 	
    Spot gold was little changed at $1,663.71 an ounce by
0335 GMT, after rising more than 1 percent last Friday and posting
its first weekly gain after three straight weeks of decline.	
    U.S. gold barely changed at $1,663.60.	
 	
    The dollar index traded near a two-week low hit on
Friday. A lower greenback helps underpin sentiment in dollar-priced
commodities by attracting buyers holding other currencies. 	
    A recent string of upbeat U.S. economic data, a strong rally on
Wall Street and a surge in U.S. Treasury yields have cooled investor
interest in gold, but some analysts believe gold's rally has not yet
run its course.  	
    "There's a good chance we'll see a relapse in U.S. data since
the economy is in a fragile recovery, which will lead to the
speculation on more quantitative easing, and that is positive for
gold," said Hou Xinqiang, an analyst at Jinrui Futures in the
southern Chinese city of Shenzhen.	
    Hou said oil prices are unlikely to slide easily from current
high levels given the sticky situation in Iran - another supportive
factor for gold.	
    Investors will closely watch changes in holdings of various
physically backed exchange-traded gold funds in the last week of the
quarter. 	
    The SPDR Gold Trust, the world's biggest gold ETF, said
its holdings fell 0.8 percent last week, the biggest weekly decline
since late December. 	
    This week, investors will also monitor key economic data from
Germany, bond auctions in Italy and a meeting of euro zone finance
ministers, during which the size of a bailout firewall is to be
discussed.  	
    	
   Precious metals prices 0335 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1663.71    1.57   +0.09      6.39
  Spot Silver        32.22    0.02   +0.06     16.36
  Spot Platinum    1632.24   12.26   +0.76     17.17
  Spot Palladium    659.72    6.22   +0.95      1.11
  COMEX GOLD APR2  1663.60    1.20   +0.07      6.18        12936
  COMEX SILVER MAY2  32.24   -0.04   -0.11     15.48         2047
  Euro/Dollar       1.3267
  Dollar/Yen         82.66

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