PRECIOUS-Gold bounces from near 2-week low on euro, Japan policy

* Price drop draws bargain hunters but many await further declines

* Spot gold seen testing support at $1,661/oz - technicals

* Coming up: U.S. new home sales; 1500 GMT

(Adds comments; updates prices) SINGAPORE, Jan 25 (Reuters) - Gold rebounded from a near two-week trough on Friday, tracking a stronger euro and helped monetary easing, but a brightened global economic outlook could curb its gains. The euro rose to its highest since last February against the dollar, helping support prices of gold and other dollar-denominated commodities, by making them more affordable to buyers holding other currencies. In addition, Bank of Japan's reaffirmation of its commitment to aggressive monetary easing also underpinned sentiment.

Monetary stimulus has been a key driver of gold's rally in recent years, as ultra-low interest rates and heightened inflation concerns send investors to bullion. But so far this year, signs that the world's top economies may be gaining traction have sent precious metals with industrial applications higher, and weighed on gold. "It now seems that the stronger tone in global equity markets, coupled with a notable easing in European and US market tensions, is leading to short-term pressure on gold," said Ed Meir, an analyst at INTL FCStone, in a research note. "We think (this) will continue for a little while longer given that negative chart picture are also contributing to the sloppier tone," he said. Spot gold fell to $1,663.11 an ounce, its lowest in nearly two weeks. By 0801 GMT, it had rebounded and was up 0.2 percent at $1,670.20, but still looked headed for a weekly decline of 0.8 percent, its sharpest loss in about a month. U.S. gold was nearly flat at $1,669.80. Though the 200-day moving average, at just below $1,663, provided some support for spot gold, technical analysis suggested that prices could test the lower level of $1,661, and possibly ease to the Jan. 4 low of $1,625.79 over the next four weeks.

Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, had dropped 19 tonnes so far this year to 1,331.706 tonnes on Jan. 24. "What I really don't like is gold ETFs have seen continuous liquidation," said the Singapore-based trader, adding that some investors have been switching out of gold ETFs and into silver or platinum funds. The price slump has triggered some physical buying interest, but many buyers were holding the purse strings tight, with hopes that prices would further decline, traders said. Supportive of gold prices, Russia's central bank said it will continue to buy gold as it seeks to diversify its foreign reserves away from paper assets it views as risky.

Spot platinum inched up 0.3 percent to $1,683, on course for about a 1 percent weekly gain, extending its winning streak to a fourth week, its longest in a year.

Precious metals prices 0801 GMT

Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1670.20 2.84 +0.17 -0.26 Spot Silver 31.69 0.06 +0.19 4.66 Spot Platinum 1683.00 5.01 +0.30 9.64 Spot Palladium 725.00 1.03 +0.14 4.77 COMEX GOLD FEB3 1669.80 -0.10 -0.01 -0.36 20683 COMEX SILVER MAR3 31.71 -0.01 -0.04 4.90 5480 Euro/Dollar 1.3408 Dollar/Yen 90.55

COMEX gold and silver contracts show the most active months

(Editing by Muralikumar Anantharaman)