SYDNEY, Feb 19 A weaker U.S. dollar drove more investors into gold on Monday, lifting bul

SYDNEY, Feb 19 (Reuters) A weaker U.S. dollar drove more investors into gold on Monday, lifting bullion prices more than $3 an ounce to a fresh seven-month high.

An early sell-off of bullion across Asia in subdued holiday trading dissipated as the U.S. currency spiralled lower, making dollar-priced gold cheaper for regional investors.

At 0550 GMT, spot gold was quoted at $672.60/$673.30 versus $668.10/$668.80 an ounce at 0004 GMT and $669.00/9.70 an ounce late on Friday.

''It's mostly dollar-related because of the holiday,'' a dealer said.

Gold was last more costly on July 17, 2006, when the price of an ounce reached $676.00.

Helping gold on Monday, the dollar hit a six-week low against the Swiss franc after weak U.S. housing data late last week further fuelled expectations that the U.S. Federal Reserve may start cutting interest rates. The dollar also stayed near a six-week low against the euro and a five-week trough versus the yen.

But bullion was still a far cry from the 26-year peak of $730 an ounce hit last May and even further from the all-time high of $850 an ounce in 1980.

Dealers are predicting the Lunar New Year holiday breaks would leave gold markets subdued across much of Asia, while the U.S. Presidents Day holiday would dampen interest in North America.

Taiwan and China are closed for the entire week to mark the Year of the Pig, while Hong Kong and Singapore will be shut on Monday and Tuesday. South Korea and Malaysia will be closed on Monday.

COMEX electronic gold and silver futures on the CME Globex platform will be trading as usual on Monday. The Chicago Board of Trade's electronically traded 100-oz gold contract will be closed for daytime trading and reopen at normal evening hours.

Gold's advance was checked in part by lower oil prices, which were allaying concerns that inflation might go up, a tip-off for some to buy gold.

U.S. crude oil futures fell to around $59 a barrel in electronic trading, paring Friday's strong gains.

Gold's rebound swept silver prices higher in its wake. Spot silver was 7 cents up against Friday's late New York quote at $14.02/4.07 an ounce.

Platinum rose $18 to $1,219/$1,224 an ounce.

Palladium was unchanged at $339/344 an ounce.

REUTERS CS DS1306