TOKYO, March 2 Gold fell below $ 660 an ounce for the first time since Feb. 21 on Friday

TOKYO, March 2 (Reuters) Gold fell below $660 an ounce for the first time since Feb. 21 on Friday as unstable global share prices prompted investors to reduce positions in commodities.

Investors often buy gold as a safe bet when financial markets look shaky, but investment funds are keen to unload the metal after plunges in global equity markets this week.

Many investment funds were seen to have bought commodities, including gold, over the past month with the proceeds from stocks, as Wall Street reached record highs last month.

''Gold used to be a safe-haven during times of uncertainty in the financial market -- but not any more,'' said Koji Suzuki, a market analyst at Kazaka Commodity in Tokyo.

''People are more interested in locking in profits in commodities to cover losses in stocks now. Gold will stay weak as long as share prices are unstable,'' Suzuki said.

As of 0635 GMT, spot gold was trading at $659.00/659.70 per ounce, down from $662.60/663.30 in New York on Thursday. It fell as far as $657.90 on Friday, the lowest since Feb. 21.

Technical sentiment deteriorated after the price went below several near- and medium-term moving averages.

Cash gold was below its seven-day moving average of $674 and its 30-day average around $660.

''There are positive factors such as strong oil prices and geopolitical factors, but right now all the focus is on share prices,'' Suzuki said.

On Friday, Japan's Nikkei share average <.n225> closed down 1.35 percent, erasing all its gains for the year as investors became cautious after the global market sell-off and strength in the yen.

The Dow Jones industrial average <.dji> and the benchmark Standard&Poor's 500 Index <.spx> both sank nearly 2 percent in early morning trade on Thursday although both finished just slightly down.

The Shanghai stock market <.ssec>, which appeared to trigger the global sell-off this week, gained more than 1 percent by late afternoon trade.

FUTURES WEIGH Cash gold came under additional pressure as Japanese gold futures plunged by their daily limit.

Key gold futures on the Tokyo Commodity Exchange fell by their daily 60 yen limit to 2,522 yen per gram on active sales reflecting this week's rise in the yen against the dollar.

They were pegged at the low throughout the day, closing down 2.3 percent from the previous close of 2,582 yen.

Still, traders said gold could receive some support from firm energy prices.

U.S. crude oil futures hit a 2007 high on Thursday on tightening fuel supplies in the United States.

On Thursday, U.S. crude rose for a seventh day and settled up 21 cents at $62.00 after hitting $62.40, the highest since Dec.

26.

Gold hit a nine-month high of $689 on Monday as firm crude oil and tensions between Iran and the United States raised the metal's appeal as a haven and a hedge against inflation.

Traders were watching whether gold could hold above $655.40 -- a low reached on Feb. 20.

The market was expecting buyers from China and India to emerge should it fall to around $650, Tokyo traders said.

Spot silver edged higher on short-covering after plunging 4 percent the previous day.

Silver was quoted at $13.62/13.67 an ounce compared with Thursday's late U.S. level of $13.56/13.61.

Platinum tumbled to $1,221/1,226 an ounce from $1,236/1,241 in New York.

Cash platinum was weighed down after TOCOM platinum futures closed down by more than 2 percent on heavy liquidation by speculators.

Palladium was unchanged at $347/$352 an ounce from late New York levels the previous day.

REUTERS KR SSC1305