(REUTERS) -- Gold prices slid towards $1,650 an ounce on Monday, taking a breather after four straight days of gains, as upcoming elections in France and Greece and a European Central Bank meeting later this week pressured the euro versus the dollar.

Spot gold was down 0.6 percent at $1,652.80 an ounce at 1406 GMT, while U.S. gold futures for June delivery were down $10.90 an ounce at $1,653.90.

The metal earlier rose as high as $1,665.60 an ounce after data showing the U.S. economy grew more slowly than expected in the first quarter reignited speculation that the Fed could take fresh measures to stimulate the economy by raising money supply.

Non-yielding gold, which is priced in dollars, tends to benefit from such an environment. It struggled to build on that support as the dollar firmed, however, and remains within this month's $1,610-1,680 range, the narrowest since last June.

The QE trade is the key thing, Macquarie analyst Hayden Atkins said. If we get a more material deterioration in U.S. data, that would bring that trade back into play. That would probably move it one way or another.

Gold traders awaited a European Central Bank press conference and rates decision on Thursday and U.S. payrolls data on Friday for clues as to the next direction of trade.

Gold's ability to hold above $1,620 an ounce this month, despite several tests of that level, has been cheering investors that the longer-term bull trend is intact, analysts said.

After peaking in mid first quarter, gold prices fell amid renewed volatility. We note such corrective price movements have been evident throughout the 2001-12 bull market, especially since the acceleration in the uptrend from 2009, Morgan Stanley said in a note.

Notably, this latest correction, while painful, has not retested the late December 2011 lows and has so far been notably less severe than the retracement in the second half of 2011.


Money managers in gold futures and options cut net long positions in the week ended April 24 for their third decline in four weeks, as the metal's price failed to break out of a narrow range by last Tuesday. One market watcher noted that the speculative fervor had gone out of gold.

On Friday, holdings of gold-backed exchange-traded funds rose, with the largest, New York's SPDR Gold Trust, adding nearly 78,000 ounces to its reserves, its largest one-day inflow in nearly a month.

Concerns about off-take of physical gold, particularly in number one bullion consumer India, in recent weeks have knocked investors' confidence the precious metal. Indian sales have been pressured by rupee weakness and high spot prices.

Indian buying will never disappear; after all, gold is well-engrained in the country's culture and traditions, UBS said in a note. What is likely though is a continuation of the unimpressive ... demand that we have seen in recent months.

Although physical demand is not typically the force that drives a rally, the significance lies in its ability to come in and provide a floor during a pullback, it added. With the rupee expected to weaken further up ahead, this means the dollar price of gold needs to ease up even more than where demand was evident over the past few weeks in the $1,620-1,630 area.

Among other precious metals, silver was down 1.7 percent at $30.70 an ounce. Spot platinum was down 0.3 percent at $1,561.85 an ounce, while spot palladium was down 0.9 percent at $672.20 an ounce.

The platinum/palladium ratio, which measures the number of palladium ounces needed to buy an ounce of platinum, fell to its lowest in nearly three months on Monday at 2.31 as platinum continued to underperform against its fellow autocatalyst metal.

Platinum is set to fall 4.6 percent this month, while palladium is on track to rise 4.9 percent and gold is headed for only a marginal decline.

Miner Aquarius Platinum posted a net loss for the third quarter, hit by weaker prices and a drop in production on the back of poor ground conditions, continuing safety stoppages and worse than usual absenteeism after the Christmas holidays.