By Amanda Cooper LONDON, May 16 (Reuters) - Gold steadied on Monday, as the twin forces of deepening concern about the euro zone debt crisis and the growing strength of the dollar offset each other, while investors kept silver pinned near last week's 2-1/2 month lows. The euro slid to a seven-week low against the dollar after IMF Chief Dominique Strauss-Kahn, a key voice in euro zone debt talks, was charged with sexual assault, increasing uncertainty on aid for Greece and other indebted euro zone countries. The dollar index .DXY, a measure of the greenback's strength against a basket of currencies, advanced to its highest since early April. [USD/][ID:nN15215355] Spot gold XAU= was little changed at $1,494.49 an ounce by 0838 GMT, after ending flat in the previous week. Prices had fallen by about 5 percent from the lifetime high of $1,575.79 hit on May 2. U.S. gold GCcv1 was nearly unchanged at to $1,494.50. "The dollar is coming into some safe-haven bids, with all the uncertainties and the turmoil and there's maybe a reassessment that we'll see the dollar aggressively firm," said Credit Agricole analyst Robin Bhar. "So it's dollar strength and possibly euro zone jitters." MIXED BLESSING Gold in euros XAUEUR=R did not get much of a lift from the renewed concern Greece will have to restructure its debt without further EU support and euro zone finance ministers were not expected to make much progress tackling Athens' financial crisis. Euro-priced gold rose 0.1 percent to 1,057.56 euros an ounce, having fallen by 0.2 percent so far this year as the euro has gained ground against the dollar. "It is a bit of a double-edged sword, because in theory any debt, any currency woes should play into gold's strength. But on the other hand if the euro is pummelled and the dollar strengthens, they offset each other," Bhar said. Euro zone finance ministers are likely to back a bailout package for Portugal in a meeting on Monday.[ID:nLDE74E0N7] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Technical outlook on gold: [ID:nL4E7GG02I] IMF chief charged with sex assault [ID:nLDE74E04O] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> Spot silver XAG= fell nearly 3 percent to $34.23 earlier, before regaining some lost ground to show a 1.9 percent drop on the day to $34.59. U.S. silver SIcv1 fell by 1.2 percent to $34.61. Market participants are awaiting a speech by U.S. Federal Reserve chairman Ben Bernanke later in the day, in which he was expected to repeat the stance that the Fed is in no rush to raise interest rates. The Shanghai Gold Exchange, China's main precious metals bourse, said it will lower the margin requirement on silver forward contracts to 15 percent on Monday's settlement from 18 percent, after market volatility ebbed. A decline in the prices of precious metals in recent weeks fuelled an exodus of investment interest in exchange-traded funds, as well as in futures and options markets. Global holdings of gold in exchange traded funds staged a second weekly net decline last week, falling by nearly half a million ounces to their lowest this year. Holdings in the SPDR Gold Trust (GLD), the world's largest gold ETF, declined to a one-year low of 1,192.253 tonnes on Friday. [GOL/ETF] Managed money sharply scaled back their bullish bets in COMEX silver futures and options to the lowest level since January, as prices tumbled as much as 30 percent from a record high near $50 an ounce, U.S. regulator data showed on Friday. [ID:nN13278663] Rising global inflation, uncertainties in euro zone fiscal conditions and ongoing unrest in the Middle East and North Africa will likely to continue to drive nervous investors to precious metals, especially gold, analysts said. "With the outlook for PGMs (platinum group metals) blemished by the disruption in the global auto sector supply chain and silver continuing to trade in extremely volatile conditions, we expect investors will look increasingly toward gold to hedge systemic financial risk," said Morgan Stanley in a research note. Platinum XPT= was last down 0.2 percent at $1,753.00 an ounce, while palladium XPD= was flat at $706.22, ahead of a key industry report from refiner Johnson Matthey (JMAT.L) at 1200 GMT.

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