Gold was steady near $1,640 an ounce on Monday, as investors looked past data showing stabilising factory activities in China and focused on a U.S. Federal Reserve policy meeting later in the week for cues on the possibility of further monetary easing. Gold fell 1 percent last week, in tandem with equities and other commodities, as fear about Spain's debt crisis raised concerns about global economic growth and dented risk appetite. Investors largely ignored the HSBC Flash Purchasing Managers Index which showed that China's factories stabilised in April as output ticked higher, new business rose from multi-month lows and export orders perked up. All eyes are on the Federal Open Market Committee meeting on Tuesday and Wednesday, as the Fed's attitude towards more monetary easing remains vital to gold's fortunes. Bank of Japan will meet on Friday, and is expected to ease again. "We probably won't see much move before the Fed meeting, as people are sidelined and waiting for new cues from the Fed and Bank of Japan," said Yuichi Ikemizu, head of commodity trading, Japan, at Standard Bank. Spot gold moved in a range of $3 and traded nearly flat at $1,640.61 at 0655 GMT. U.S. gold was little changed at $1,641.60. Expectations of more money-printing by the Fed pushed gold to nearly $1,800 in February, before a less dovish stance taken up by Fed officials sank bullion to about $1,611 in early April. Gold has been stuck in a range between $1,610 and $1,680 since the beginning of April, facing headwinds from diminishing hopes of more easing from the Fed, while price-sensitive physical buying lends support to the lower end of the range. "There is still pressure for gold prices. The market has been trying to push the support level at $1,630-$1,640, although the push is rather half-hearted right now," said Nick Trevethan, senior metals strategist at ANZ in Singapore. Europe's fiscal health also remains a concern. Spanish and Italian bond yields were still near dangerously high levels, while the prospect of a Socialist candidate winning the French presidential election added to worries whether the powerful Franco-German ally that has helped set tones in the region's battle against its debt problems will remain intact. Over the weekend the International Monetary Fund managed to more than double its lending power in a bid to protect the world economy from the euro zone debt crisis, which is now in its third year. TRADE INTEREST SLUGGISH Trading interest in gold was sluggish as investors lack conviction in the direction of market. Money managers raised their net long positions in U.S. gold futures and options in the week ended April 17 to 112,275 contracts, from 109,511 contracts a week earlier - its lowest in more than three years. While the net length in gold had fallen more than 40 percent from this year's peak hit in early March, the total open interest edged lower from a week earlier to 640,791 contracts, down 13 percent from March and near a two-year low hit earlier in the month. Gold traders in India, the world's top gold consumer, stayed away from gold purchases despite the upcoming Akshaya Tritiya festival on Tuesday, traditionally a key gold-buying day, as the weakness in rupee made imported bullion more expensive.

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