* Euro rise based on Greece aid deal boosts risk appetite
* Gold's inverse link with dollar could weaken - traders
* SPDR gold ETF reports second inflow this week
* Coming up: Personal Income, Core PCE Index on Monday
(Recasts, adds quotes, updates closing prices, changes byline, dateline)
By Frank Tang
NEW YORK, March 26 (Reuters) - Gold rose on Friday, reclaiming $1,100
an ounce as a euro rally on a Greece aid deal boosted investor sentiment,
and the market is expected to take trading cues from the currency market.
The metal ended the week nearly flat after Friday's gains, whipsawing
between safe-haven demand driven by sovereign debt worries and a resurgent
dollar due to euro's weakness.
"The day's focus is on the dollar. Any good news out of Europe is going
to weaken the dollar, and the commodities react positively to that," said
Jeff Pritchard, a trader at broker-dealer Altavest.
In the past two weeks, gold at times showed it can trade regardless of
dollar movements, as uncertainties about currencies triggered
flight-to-quality demand. Analysts expected the metal's inverse link with
the dollar could weaken.
"The gold market has been trading sideways in the past two months.
Until it finds a trend, some days you will see that disconnect between the
U.S. dollar and the gold market," Pritchard said.
Spot gold <XAU=> was at $1,102.75 an ounce at 1:44 p.m. EDT (1744 GMT),
against $1,090.35 late in New York on Thursday.
U.S. April gold futures <GCJ0> on the COMEX division of the NYMEX
settled up $11.40, or 1 percent, at $1,104.30.
Short-covering ahead of the weekend following April option expiration
on Thursday triggered buying, COMEX futures traders said.
Geopolitical tensions also lent support to bullion, after a South
Korean naval ship sunk in waters near a contested sea border with North
Korea.
Gold was also boosted as the euro rallied after euro-zone leaders
agreed an aid package under which Greece would receive both bilateral loans
from euro-zone partners and funding from th International Monetary Fund if
it faced severe difficulties. []
Earlier in the session, gold fell as a government report showed the
U.S. economy grew at a slightly less brisk pace in the fourth quarter,
diminishing the metal's inflation hedge appeal. []
Gold market participants are now digesting information after the U.S.
Commodity Futures Trading Commission held a day-long hearing to consider
whether limiting metals speculation could irreparably harm markets.
[]
RESURGENT ETF DEMAND
Better sentiment among bullion investors was evident as gold
exchange-traded funds reported inflows.
Holdings of the world's largest gold-backed ETF, New York's SPDR Gold
Trust <GLD>, rose 4.568 tonnes on Thursday to 1,124.647 tonnes, their
highest since Jan. 5. It rose by the same amount on Tuesday.
"An increase in ETF holdings showed gold still attracted investors as
currencies remained volatile," said Richcomm Global Services in a note.
In Asia, jewelers chased gold bars after bullion prices dropped more
than $10 this week, while main consumer India was stocking up as the
wedding season begins again in April, dealers said on Friday. []
Gold has seen good physical demand emerging as prices declined below
$1,100 an ounce, dealers said, helping put a floor on prices.
Silver <XAG=> was at $16.82 an ounce against $16.56, platinum <XPT=>
was at $1,595 an ounce versus $1,597 and palladium <XPD=> at $455 against
$450.50.
Prices at 1:40 p.m. EDT (1740 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCJ0> 1104.20 11.30 1.0 1096.20 0.7
US silver <SIK0> 16.890 0.149 0.9 16.845 0.3
US platinum <PLJ0> 1596.90 -9.50 -0.6 1471 8.6
US palladium <PAM0> 456.60 4.00 0.9 408.85 11.7
Gold <XAU=> 1104.05 13.70 1.3 1096.35 0.7
Silver <XAG=> 16.85 0.29 1.8 16.84 0.1
Platinum <XPT=> 1593.00 -4.00 -0.3 1465.50 8.7
Palladium <XPD=> 454.00 3.50 0.8 405.50 12.0
Gold Fix <XAUFIX=> 1096.50 -1.50 -0.1 1104 -0.7
Silver Fix <XAGFIX=> 16.85 6.00 0.4 16.99 -0.8
Platinum Fix <XPTFIX=> 1596.00 5.00 0.3 1466 8.9
Palladium Fix <XPDFIX=> 456.00 2.00 0.4 402 13.4
(Additional reporting by Jan Harvey in London)
