LONDON, March 12: Gold pared gains on Monday after rising on a weaker dollar, as investors sold their trading positions due to the metal's inability to retain recent advances. Gold rose as high as $653.75 an ounce before falling to $651.60/653.10 by 1047 GMT, against $649.90/650.65 in New York late on Friday, when it rallied to a one-week high of $658.

We have seen some profit-taking from the non-commercials.

It looks like some of them are happy to take profits around these numbers, said David Gornall, head of bullion and foreign exchange at Natexis Commodity Markets.

Speculators in US gold cut their net long position by 28 per cent as the precious metal was briefly caught in a tide of selling that extended from a week ago.

Non-commercial players in US gold were net long on 101,698 contracts by Tuesday, against the previous week's tally of 142,092, the Commodity Futures Trading Commission said in its weekly Commitment of Traders report on Friday.It will also tell you that they don't really care for the idea that gold is going to be back at $700 quite soon.

There is definitely some downward pressure at the moment, Gornall said.

“There is not so much cash around and it's finding its way back into the equities now,” he added.

The metal tumbled to a six-week low of $632.30 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 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 market took a note of China central bank's statement saying it would gradually promote reforms of the yuan's exchange rate regime and improve its foreign exchange management this year.

In other metals, silver edged up to $13.01/13.05 an ounce from $12.92/12.97 in New York, while platinum rose to $1,201/1,205 an ounce from $1,195/1,200. Palladium was down $1 at $349/353.—Reuters