TOKYO, Feb 22 Gold was little changed on Thursday, with sentiment remaining bullish after

TOKYO, Feb 22 (Reuters) Gold was little changed on Thursday, with sentiment remaining bullish after it surged more than 3 percent to a nine-month high as strong energy prices and geopolitical tensions induced heavy fund buying.

Traders were eager to test the metal's upside after Wednesday's rally, with demand rising for gold exchange-traded funds (ETF) and investors keen to diversify into gold and other commodities as U.S. equity prices were holding near record highs.

Gold's allure as a tool to hedge against inflation also rose after a surprisingly big pick-up in core U.S. consumer prices in January.

''The market is very bullish and $700 an ounce is clearly in focus,'' said Tatsuo Kageyama, an analyst at Kanetsu Asset Management.

''Demand for gold ETFs is clearly there. Also funds could be buying gold to diversify from equities which have been near record highs and also with U.S. bond prices dropping.'' As of 0236 GMT, spot gold was little changed at $678.30/679.00 per ounce, compared with $678.90/679.60 in New York, where it had jumped more than 3 percent to a nine-month high of $682.10.

Technicals improved after Wednesday's rally, and cash gold could test the psychologically important $700 level in the near term. It was more than 1 percent above its seven-day moving average of around $670.

On Wednesday, crude oil prices rose above $60 a barrel as a rash of snags affecting U.S. oil refineries, pipelines and an oil field sparked worries of a supply crunch in the United States, the world's biggest energy consumer.

Tensions in Iran induced safe-haven buying in gold.

Iran vowed on Wednesday to press on with its nuclear fuel programme, ignoring a U.N. deadline to freeze uranium enrichment or face broader sanctions, but offered to guarantee it would not try to develop atomic weapons.

''I'm a bit worried about the strength in the dollar against the yen, but gold was supported due to inflationary concerns after yesterday's strong U.S. CPI figures,'' Kageyama said.

U.S. January consumer price inflation was up a higher-than-expected 0.2 percent. Excluding food and energy costs, the core inflation rate rose 0.3 percent, driven by medical costs.

Japanese gold futures surged by the daily 60-yen limit to 2,635 yen ($21.80) per gram, tracking sharp gains in cash gold and reflecting heavy fund flows into other commodities.

The key TOCOM gold contract December 2007, was at its highest since September 1985. It held at the level throughout the morning trade, and was up 2.3 percent from Wednesday's close of 2,575 yen.

Platinum was flat at $1,225/1,230 an ounce, from $1,225/1,229 late in New York.

Palladium rose to $343/348 an ounce from $340/344 in New York.

Silver fell to $14.18/14.23 an ounce from $14.23/14.28 in New York.

($1=120.87 yen) REUTERS CS DS1157