TREASURIES-Prices pare gains before 7-year auction

* Looming U.S. spending cuts feed safety bid

* Month-end extension buying seen adding bond bid

* Treasury to auction $29 billion seven-year notes

* Fed buys $5.02 billion debt due 2017

NEW YORK, Feb 27 (Reuters) - U.S Treasuries pared most of their earlier price gains on Wednesday as investors prepared for the Treasury to auction new seven-year notes. Small price gains were maintained on safety buying on worries over the automatic U.S. spending cuts due to take effect on Friday unless lawmakers reach a budget deal and on the political uncertainty in Italy. Portfolio readjustments ahead of the month-end also supported prices. "There is still that uncertainty bid and a little bit of a technical bid," said Lou Brien, market strategist at DRW Trading in Chicago. A rally in some Treasuries futures contracts may have also boosted the cash bond market. Some contracts traded at levels that sparked technical buying, Brien said. Benchmark 10-year Treasuries were last up 2/32 in price to yield 1.88 percent, down from 1.89 percent late on Tuesday. The prices have rallied since yields hit around 2 percent last week. Traders said the notes may next test resistance at around 1.82 percent. Thirty-year Treasuries bonds gained 5/32 in price to yield 3.07 percent, down from 3.08 percent late on Tuesday. The Treasury will auction $29 billion in seven-year notes on Wednesday, the final sale of $99 billion in new supply this week. Treasuries gained earlier on Wednesday even after data showed a jump in durable goods orders, excluding aircraft. "The durable goods report was better than the headline report and the market barely backed up at all," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York. Bonds had gotten a boost after Federal Reserve Chairman Ben Bernanke on Tuesday strongly defended the U.S. central bank's bond purchase program. The Fed bought $5.02 billion in debt due 2017 on Wednesday as part of this effort. "Bernanke reassured on the continuation of quantitative easing, and I think that you probably had the long end a little bit oversold," Brien said. Bernanke's comments came after the release last week of the latest Fed minutes showed that some policymakers were increasingly cautious about continuing the bond purchases, heightening speculation that the Fed might end the buybacks before year-end. Bernanke on Wednesday repeated his testimony to Congress.