SINGAPORE (Reuters) - Gold prices rose 1 percent on Monday, reversing a decline in the previous session, after the leaders of France and Germany promised to unveil new steps by the end of the month to resolve the euro zone's debt crisis. The announcement by leaders of the bloc's top two economies followed the downgrade of credit ratings of Italy and Spain last week, which depressed the price of bullion. "For now, gold seems to follow the movement in the commodities market," said Ong Yi Ling, an analyst at Phillip Futures, adding that the safe-haven appeal of gold had faded after unprecedented volatility in recent months. Spot gold rose nearly 1 percent to $1,653.69 an ounce, before trimming some gains to $1,651.19 by 0709 GMT. The precious metal gained 0.9 percent last week, snapping four weeks of consecutive losses -- its longest downward streak since January. U.S. gold climbed as much as 1.2 percent to $1,655.7, and eased to $1,653.30. Technical analysis suggested spot gold is likely to hover in the range of $1,596 and $1,677 during the day, said Reuters market analyst Wang Tao. The dollar fell half a percent against a basket of currencies, helping strengthen commodities, as a cheaper dollar encourages buyers holding other currencies. China's financial markets have reopened after the week-long National Day holiday. The popular gold forward contract on the Shanghai Gold Exchange rose more than 1 percent to 341.90 yuan per gram, or $1,674.50 an ounce. "We are seeing some buying interest from Shanghai, and the interest in physical gold is still strong," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. Premiums on gold bars in Hong Kong remained around $3 per ounce, as physical stockpiles were running low, said dealers. Money managers, including hedge funds and other large speculators, scaled back bullish bets in gold futures and options for the eighth time in nine weeks, as bullion deepened its correction from its record set early September. Investors are eyeing data from the United States this week, including minutes of the Federal Reserve's Sept. 20-21 meeting; weekly filings for jobless benefits and retail sales and consumer confidence numbers for September, after Friday's data suggested a stronger-then-expected U.S. labour market. Prices of other precious metals also rallied. Spot silver surged 2.5 percent to $31.93, before easing to $31.70. U.S. silver jumped 3.2 percent to $31.98 and pared some gains to $31.72. Spot platinum gained more than 2 percent to $1,518 an ounce, and spot palladium rose as much as 3.2 percent to $601.7.

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