Gold off 1-month low, Tokyo futures rebound

SINGAPORE, May 11 (Reuters) Gold rebounded from lows on Friday on the back of physical buying in Asia but investors remained nervous because of a firm US dollar and after a sharp drop the previous day.

Silver, platinum and palladium also bounced back after hitting intraday lows.

''There's some physical buying in the Asian region. The market has dropped so much and it attracts some buying interest,'' said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

He pegged support around $665 an ounce.

Spot gold was at $667.25/668.00 an ounce, steady from $667.00/667.50 late in New York on Thursday, when it had fallen as far as $664.00 on a rally in the dollar, sales by central banks and declines in industrial metals such as copper.

Gold, which hit an intraday low of $664.10 on Friday, has lost more than 3 percent since rallying to an 11-month high of $693.60 on April 23.

This week, it jumped to its highest in nearly two weeks around $690 -- still below a key resistance of $700.

''Gold's failure to break through the key $700 level earlier in the week had also contributed to last night's falls, with a certain amount of despondency materialising,'' said Investec Australia in a daily report.

Gold rallied to its highest level in 26 years to $730 in May 2006 as investors diversified their portfolios on Middle East tensions, record-high oil prices that raised fears of inflation and uncertainties over the U.S. dollar's outlook.

Tokyo Commodity Exchange gold futures plunged in line with the cash price but then rebounded.

The most active April 2008 TOCOM gold futures contract tumbled by its daily 60-yen limit to 2,586 yen ($21.55) per gram due to sharp falls in cash gold after liquidation by investment funds the previous day.

The contract ended at 2,603 yen per gram, down 43 yen from Thursday's close.

''I think the outlook for gold is fairly uncertain at this point of time. I suspect it would be possible for gold to recover from what was a fairly sharp correction last night,'' said David Moore, a commodity strategist at the Commonwealth Bank of Australia.

''But a lot will depend I think on what happens to the U.S.

dollar, and I think also what happens to base metals in the near term,'' he said.

The dollar rebounded to 119.90 yen partly on buying by Japanese investment trusts, after hitting a low of 119.71 yen earlier in the session. The dollar hit a 2-1/2-month high of 120.54 yen in the previous session.

The euro was steady against the dollar at $1.3485 after falling to a one-month low around $1.3465 in the previous session as investors trimmed bearish bets on the greenback after key central bank meetings this week.

Shanghai copper prices fell almost 4 percent on Friday after a fall in London futures and as the threat of a substantial rise in Chinese copper stocks weighed on sentiment.

In other precious metals, silver fell to its lowest in nearly two months at $12.93 an ounce before rebounding to $13.00/13.03, still down from $13.04/13.09 late in New York.

Platinum rose to $1,314/1,319 an ounce from $1,310/1,315 in New York.

Palladium rose to $359/364 an ounce from $358/361.

Earlier on Friday, platinum hit a one-week low and palladium fell to a one-month low.

Precious metals prices at 0637 GMT Last Net Change Pct Move Turnover (lots) TOCOM Gold 2603.00 -43.00 -1.63 107476 TOCOM Platinum 4974.00 -30.00 -0.60 59944 TOCOM Silver 501.00 -14.30 -2.78 3178 TOCOM Palladium 1414.00 -14.30 -1.39 1720 Spot Gold 667.80 Spot Platinum 1314.00 Spot Silver 13.00 Spot Palladium 359.00 Change so far in 2007 Metal Latest bid End prev year Pct Move TOCOM Gold 2603.00 2445.00 +6.46 TOCOM Platinum 4974.00 4254.00 +16.93 TOCOM Silver 501.00 493.30 +1.56 TOCOM Palladium 1414.00 1255.00 +12.67 Spot Gold 667.80 636.10 +4.98 Spot Platinum 1314.00 1132.00 +16.08 Spot Silver 13.00 12.85 +1.17 Spot Palladium 359.00 332.00 +8.13 Euro/Dollar $1.3487 Dollar/Yen 119.85 TOCOM prices in yen per gram, spot prices in $ per ounce.

($1=119.98 yen) (Additional reporting by Chikafumi Hodo in Tokyo) REUTERS PM GC1337