LONDON, March 16: Gold jumped nearly one per cent to trade above $650 an ounce on Friday ahead of the release of key US data, with a sharp drop in the dollar supporting the metal.

Spot gold rose as high as $652.10 an ounce before easing to $651.20/652.20 late in New York on Thursday, when it rose more than $3.

Gold definitely took a positive lead from the dollar and investors are coming back into the market now, said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.

But overall, the price rises that we have seen were not as big as we would have expected, given the drop in the dollar since the beginning of March, he added.

Investors were keeping a close watch on share prices, oil and the dollar for direction, but people remained jittery due to the metal's sharp fall after hitting a nine-month high of $689 on Feb. 26 and long trading positions in the New York market.

Looking at CFTC figures, I believe we're still looking at a relatively significant speculative longs, said Darren Heathcote of Investec Australia, adding gold might see a sell-off.

The Commodity Futures Trading Commission said in its weekly Commitment of Traders report that non-commercial players in US gold were net long on 101,698 contracts by Tuesday, against the previous week's tally of 142,092.

Silver rose to $13.04/13.09 from $12.97/13.02 an ounce in New York, while palladium eased to $348/353 an ounce from $349/354.—Reuters