SINGAPORE (Reuters) - Gold inched up on Monday, bouncing off a one-week low marked the session before as the dollar eased from a more than six-month high hit in the previous session on the back of upbeat U.S. data.
The $85 billion automatic spending cuts in U.S. government programmes, known as the "sequester", kicked off on Friday in the absence of a deal among lawmakers. Investors will be watching for its impact on the economy.
FUNDAMENTALS
* Spot gold had risen 0.3 percent to $1,580.19 an ounce by 0043 GMT, after hitting a one-week low of $1,564.44 in the previous session.
* U.S. gold was up nearly half a percent at $1,579.90.
* President Barack Obama formally ordered broad cuts in U.S. government spending on Friday night after he and congressional Republicans failed to reach a deal to avert automatic reductions that could dampen economic growth and curb military readiness.
* But vigorous manufacturing data, together with strong auto sales and a rise in consumer sentiment in February, suggested a pickup in economic growth, offsetting concerns about the impact of the spending cuts.
* Hedge funds and money managers increased their net long gold futures and options positions in the week to February 26 from a more than four-year low hit a week earlier, Commodity Futures Trading Commission data showed on Friday.
* In contrast, sales of American Eagle gold coins rose sharply year-on-year in February, and silver coin sales posted their strongest performance for the month since 1986, highlighting strong safe-haven buying amid economic uncertainty.
* SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, said its holdings inched down on March 1 to 1,253.885 tonnes in its ninth consecutive session of decline.
MARKET NEWS
* U.S. stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected U.S. government spending cuts.
* The dollar index held near a six-month high hit in the previous session. A stronger greenback makes dollar-priced commodities less affordable to buyers holding other currencies.
(Reporting by Rujun Shen; Editing by Joseph Radford)
