Gold edges up as dollar weakness persists

Gold prices edged higher on Monday, building on gains in the previous session, as the dollar wallowed near a two-week low against a basket of currencies and supported sentiment for bullion.

FUNDAMENTALS

* Spot gold edged up 0.3% to USD 1,666.89 an ounce by 0038 GMT, after rising more than 1% last Friday.

* US gold gained 0.3% to USD 1,666.70.

* The dollar index dropped to a two-week low on Friday on US home sales data, which showed new US single-family home sales fell in February while prices jumped to their highest level in eight months.

* Money managers in 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 US economic data triggered fund selling.

* This week, investors will watch key economic data from Germany, bond auctions in Italy and a meeting of eurozone finance ministers, during which the size of a bailout firewall is to be discussed.

MARKET NEWS

* US stocks rose in light volume on Friday, buoyed by rising energy and basic materials shares, as the S&P 500 kept showing resilience even as it posted its second negative week so far this year.

* The euro held near a three-week high against the greenback on Monday, while commodity currencies such as the Australian dollar steadied after a hammering last week, though persistent worries on the global economy were seen keeping a lid on their gains.

DATA/EVENTS

0800 Germany Ifo business climate Mar 2012

0800 Germany Ifo current conditions Mar 2012

0800 Germany Ifo expectations Mar 2012

U.S. Build permits R chg mm Feb

1400 U.S. Pending homes index Feb

PRICES

Precious metals prices 0038 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1666.89 4.75 +0.29 6.59

Spot Silver 32.29 0.09 +0.28 16.61

Spot Platinum 1632.99 13.01 +0.80 17.23

Spot Palladium 659.00 5.50 +0.84 1.00

COMEX GOLD APR2 1666.70 4.30 +0.26 6.38 3618

COMEX SILVER MAY2 32.30 0.03 +0.09 15.71 967

Euro/Dollar 1.3273

Dollar/Yen 82.69

COMEX gold and silver contracts show the most active months