Gold inches higher ahead of report

LONDON (Reuters) -- Gold pared earlier gains of around one percent as the latest buying spree, aided by a drop in the value of the dollar, fizzled out when prices neared $655. "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 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 "People are still speaking about big long positions still in the market. I don't expect them to have fallen much further as that would have meant much lower prices over recent days and this is not what we saw," one trader said. The Commodity Futures Trading Commission will release data for the week to Tuesday later in the day. UBS Investment Bank said in a daily note it estimated about 4.5 million ounces (Moz) of long liquidation in the week to March 13.