Gold off 1-week high; investors lukewarm

SINGAPORE, March 12 (Reuters) Gold held steady on Monday but hovered below a one-week low hit last week, suggesting that some investors remained edgy despite a recovery in global shares.

Spot gold was at 0.50/651.25 an ounce by 0238 GMT, versus 9.90/650.65 late in New York on Friday, when it had rallied to a one-week high of 8 an ounce before a jump in the dollar and a weaker oil triggered profit taking.

The metal tumbled to a six-week low of 2.30 last Tuesday, when risk-averse investors sold portfolio assets, including gold, to cover their losses following a surge in the yen and a fall in global shares.

''I doubt it if people want to take aggressive positions. Why don't we just wait until we clear the FOMC meeting. If there's indication the Fed is going to reduce the rates, then you might see gold getting a boost,'' said a dealer in Singapore.

The U.S. Federal Reserve's Federal Open Market Committee holds two-day meeting on interest rates starting starting on March 20.

''The wide range of 0 to 0 is still valid,'' said the Singapore dealer.

''I think people still want to buy gold but they may be waiting for a cheaper level. It looks like everyone also is waiting for everybody else to start first,'' he said.

The yen's decline spurred buying in Japanese gold futures, where the most active gold contract on the Tokyo Commodity Exchange currently February 2008, rose 14 yen per gram to 2,498 yen (.13).

The Nikkei average rose 0.79 percent on Monday, led by shares of exporters such as Sony Corp. following a fall in the yen and an advance in U.S. stocks.

''TOCOM is gradually recovering from the China shock,'' said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo, referring to a sharp fall in Chinese shares that triggered declines in global stock markets in late February.

Retail investors in Japan, who helped gold reach multi-year highs last year, would slowly return to the market and help the metal regain 0, said Sonoda.

Tensions between Iran and the United Nations, firm crude oil and a softer dollar helped propel gold to a nine-month high of 9 on Feb. 26.

The dollar was at 118.25 yen holding on to much of its gains made on Friday, when it jumped on data showing that the U.S. economy added 97,000 jobs in February, easing speculation of a possible rate cut by the Federal Reserve.

The euro hardly changed against the dollar at .3120.

Silver edged down to .91/12.92 an ounce from .92/12.97 late in New York.

Platinum fell to ,190/1,194 an ounce from ,195/1,200 an ounce. Palladium slipped to 9/354 an ounce from 0/353 late in New York.

(=118.21 yen) REUTERS KR SSC1134