* Prices fall $1,680 in late trade on weaker euro

* March volume close to September 2011 levels

* Support seen at $1,660 - trader (New throughout, updates prices, market activity)

By Josephine Mason and Jan Harvey

NEW YORK/LONDON March 27 (Reuters) - Spot gold prices fell off two-week highs on Tuesday after failing to pierce the $1,700 per ounce mark and as bullion tracked a weaker euro.

Losses accelerated in late New York trade after the Comex March options contracts expired.

Interest ahead of the options expiry had pushed gold just $4 shy of key resistance, but prices weakened to an intraday low below $1,680 per ounce in late afternoon as the dollar strengthened against the euro.

The slide erased the previous day's rally, falling below the 100- and 200-day moving averages they had breached on Monday. That rally came after Federal Reserve chairman Ben Benanke signaled U.S. interest rates would stay low. That would maintain the low opportunity cost of holding bullion.

Spot gold was at $1,679.44 an ounce at 5:21 p.m. EDT (2221 GMT), down $12.3 or 0.73 percent, after hitting a two-week peak at $1,696.20 earlier in the day.

U.S. gold  futures  for April delivery settled at $1,684.9 per ounce, down slightly from Monday's settlement of $1,685.6.

With most call and put options concentrated around $1,700 an ounce, expiry passed with no buying materializing to provide any upside momentum.

" Most of the open interest was at $1,700. It tried to force its way up there," said a Comex trader.

There were spikes in volume during the day, the largest taking place at around 1:15 p.m. EDT (1755 GMT), as a broker unwound his options conversions ahead of the contract expiry, the trader said.

Technical factors also held prices back after the market failed to settle above $1,690 per ounce, the trader said.

" A lot of it was also technical. If it had settled above $1,690, it would have been very bullish," he said.

The conditions are in place for it to break above the $1,700 mark, although there may be further pressure in the near term, he said, adding that bullion will find support at $1,660 per ounce.

" Once it's through there ($1,700), it will get up to $1,730, $1,750," he said. Gold has not been at those levels since the end of February.

A second trader said he expects a volatile market as traders square their books ahead of the end of the first quarter. Prices are up 7 percent since the start of the year.

Daily volume was average, although activity levels so far this month have been higher than the previous months. With three days until the end of the month, volume is already at 3.13 million lots, close to exceeding February's level of 3.2 million lots.

That would be the highest monthly volume since September, when prices hit the record of $1,920 per oz before plunging almost $400 by the end of the month.

On Tuesday, gold surrendered early gains as the euro lost ground against the dollar after a two-day rally. The precious metal tends to benefit from weakness in the dollar, which makes it cheaper for holders of other  currencies.

Monday's rally was triggered when Bernanke said the U.S. economy needed to grow more quickly to cut the unemployment rate. While he did not directly indicate the Fed was set to begin another round of bond purchases, he said a continuation of accommodative policies was needed to support faster growth.

Appetite for assets seen as higher risk mostly held firm after strengthening the previous day. World stocks touched an eight-month high on the back of Bernanke's comments and on expectations the  euro zone  would agree to a bigger crisis firewall, while oil held above $125 a barrel.

" Our economists believe that the market has been too aggressive in pricing in Fed rate hikes in 2013, while the Fed is more likely to push the hikes out to 2014 as indicated by the speech," said Barclays Capital in a note.

" We believe low interest rates and longer-term inflationary pressures should remain supportive for gold prices."

ETFs RECORD INFLOWS

Gold exchange-traded funds, which issue securities backed by physical metal, reported inflows on Monday. Holdings of the largest, New York's SPDR Gold Trust, increased by around 6 tonnes, reversing some of the previous week's 10 tonne drop.

Demand for the yellow metal in major consumer India remained subdued, however, as a strike continued among jewelers in protest at a government import levy.

" There is valid concern over Indian gold demand, which may decline on the back of higher domestic taxes on the gold industry," said Standard Bank in a note. " Indian buying has been notably weak as the strike by jewelers drags on for the 11th day today."

Silver was down 0.88 percent at $32.54 an ounce. Spot platinum was up 0.32 percent at $1,648 an ounce, while spot palladium edged down 1.07 percent to $656.

Platinum maintained an historically unusual discount to gold as buyers worried about demand for the white metal, which is chiefly used in autocatalysts.

Platinum prices are up more than 18 percent this year after a poor performance in 2011 but have struggled to maintain traction as worries persist over growth in the euro zone, a major market for platinum-heavy diesel autocatalysts. (editing by Jane Baird and David Gregorio)

* Gold at 2-week peak after biggest daily rise since Jan. 25

* Fed boosts expectations real rates will stay low

* Euro edges higher, stocks maintain upward move (Updates throughout, changes dateline, pvs SINGAPORE)

By Jan Harvey

LONDON, March 27 (Reuters) - Gold prices hit two-week highs above $1,690 an ounce on Tuesday after posting their biggest one-day rise since late January in the previous session, boosted by expectations that U.S. interest rates will stay lower for longer and gains in the euro.

The metal held above the 100- and 200-day moving averages it broke through on Monday after the U.S. Federal Reserve's signal that it would keep interest rates near rock-bottom levels reassured buyers that the opportunity cost of holding bullion would stay low.

Spot gold was up 0.1 percent at $1,693.50 an ounce at 0935 GMT. Earlier it hit a two-week peak at $1,696.20.

Fed Chairman Ben Bernanke said on Monday that the economy needed to grow more quickly to cut the unemployment rate. While he did not directly indicate that the Fed was set to begin another round of bond purchases, he said a continuation of accommodative policies was needed to support faster growth.

" The Bernanke comments suggesting the possibility of further quantitative easing of monetary policy... pushed the U.S. dollar lower and financial markets in general upwards, and so also gold," said Commerzbank analyst Carsten Fritsch.

" The prospect of further liquidity injections should put pressure on the U.S. dollar, and the prospect of continued negative real interest rates should also keep gold supported."

The euro hit its highest in more than three weeks after Bernanke's comments, helping lift gold, and has since extended gains to a one-month peak.

Appetite for assets seen as higher risk, which largely strengthened on Monday, also held firm, with European shares climbing and oil and base metals prices rising.

U.S. gold  futures  for April delivery were up $7.70 an ounce at $1,693.30. Options expiry is due on COMEX later in the day, with most call and put options concentrated around the $1,700 an ounce level.

ETFs RECORD INFLOWS

Gold exchange-traded funds, which issue securities backed by physical metal, reported inflows on Monday. Holdings of the largest, New York's SPDR Gold Trust, increased by around 6 tonnes, reversing some of the previous week's 10-tonne drop.

Demand for the yellow metal in major consumer India remained subdued, however, as a strike among jewellers in protest at a government import levy continued.

Silver was up 0.9 percent at $33.11 an ounce. Spot platinum was up 1.2 percent at $1,662.70 an ounce, while spot palladium was up 0.9 percent at $669.20 an ounce.

Platinum maintained its historically unusual discount to gold, which briefly reversed earlier this month, as buyers worried about demand for the white metal, which is chiefly used in autocatalysts.

Platinum prices are up more than 18 percent this year after a poor performance in 2011, but have struggled to maintain traction as worries persist over growth in the  euro zone, a key market for platinum-heavy diesel autocatalysts.

" We remain of the view that the platinum market needs some production curtailments to improve the fundamentals over the next few years," said Deutsche Bank in a note.

" The price recovery in the face of 'accidental' supply closures serves as a timely reminder of how susceptible the platinum industry is to disruptions," it added.

" However, with the end of the Impala strike (earlier this year) and the reduced incidences of Section 54 stoppages, supply should recover, and the market is likely to end the year in another modest surplus - 105,000 ounces - in our assessment." (Additional reporting by Michelle Martin editing by Jason Neely)

* Bernanke comments taken to support QE expectations

* Euro climbs vs dollar, lifting gold to 2-week high

* Speculators cut gold long bets for third week

By Jan Harvey

LONDON, March 26 (Reuters) - Gold prices rose 1 percent on Monday after comments from U.S. Federal Reserve Chairman Ben Bernanke that faster growth will be needed to boost employment supported expectations that further quantitative easing measures may be necessary.

Spot gold was up 1 percent at $1,678.86 at 1458 GMT. It earlier hit a two-week high of $1,683.79 after Federal Reserve Chairman Ben Bernanke said the U.S. economy needed to grow more quickly if it is to produce enough jobs to bring down the unemployment rate.

" I think it (rose) on the back of Bernanke's comments, which people have taken to mean that further funding might be required," Simon Weeks, head of precious metals at Scotia Mocatta, said. " I think people have taken that to mean that gold is still going to be in demand."

U.S. gold  futures  for April delivery were up $18.70 an ounce at $1,681.10.

The dollar slid against the euro and the Swiss franc after remarks by Federal Reserve Chairman Ben Bernanke spurred views that the bank could yet flood the market in another round of quantitative easing.

Sentiment towards the euro remains cautious, however, as investors worried about the troubles facing the  euro zone  economy.

While concerns over the bloc's debt crisis were a key factor driving gold to record highs last year, it has since re-established its usual inverse relationship with the dollar as the U.S. unit takes precedence as investors' haven of choice.

" If the dollar is going to strengthen over the next couple of days, gold should see more downward pressure," said Standard Bank analyst Walter de Wet.

" (But) looking past the next couple of weeks, I think the rally is not over," he added. " In real terms interest rates remain negative, and we expect them to remain negative for at least another two years."

SPECULATORS RETREAT

Data from the U.S. Commodity Futures Trading Commission on Friday showed money managers in gold futures and options cut their bullish bets for a third straight week to the weakest level in two months.

" Declining a hefty 3.1 million ounces, the Comex gold book now sits at a relatively modest 17.58 million ounces, bringing positioning to its lowest level since the week of Jan. 10 and some 53.1 percent of the all-time high," said UBS in a note.

" In just three weeks, spec net longs have collapsed by 10 million ounces. So in theory, from a positioning perspective, gold's spec baggage looks relatively light... which suggests some upside price direction is possible."

Volume data from the Shanghai Gold Exchange suggested demand from  China, the world's second largest consumer of the precious metal, is soft, the bank added.

A Reuters poll suggested India's decision to double gold import duty to four percent could cut imports to the number one global consumer by a third in 2012, to their lowest level in two years.

Chinese and Indian demand has a huge impact on gold prices.

" Those two countries together make up about 42 percent of total demand, compared to 23 percent of total demand five or six years ago," Nick Holland, chief executive of miner Gold Fields, told the Reuters mining summit on Monday.

" Those are two economies that are likely to grow at a significant pace, certainly relative to the West," he added. " They have a strong affinity for gold, and they also have an increasing number of the population who are being urbanised. Of the extra income they get, some will find its way into gold."

" I believe that is a fairly good underpin for the gold price."

A strike by jewellers to protest against a government levy entered its tenth day in most parts of India on Monday, bringing imports to a near standstill from the world's biggest buyer of bullion in the peak wedding season.

Silver rose 1.5 percent to $32.68 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, eased back to 51.48 from 52.1 on Friday.

Coeur d'Alene Mines' Chief Financial Officer Frank Hanagarne said he saw the silver price at $25 an ounce or above over next 3 years, adding that silver industrial demand should support continued strong price.