Gold steady, Tokyo futures dip, seek direction

TOKYO, May 23 (Reuters) Gold steadied on Wednesday after a decline in New York on a higher dollar and weaker crude oil prices, which helped drag down Tokyo futures amid a lack of fresh incentives.

Spot gold fetched $659.00/$659.70 an ounce at 0242 GMT, little changed from $658.80/$659.30 last quoted in New York.

''I think the market is best described as trying to test the bottom, rather than being in an actual downtrend,'' said Akira Doi, director at Daiichi Commodities Co. Ltd.

He said the market, lacking fresh news to provide direction, was stuck between trying to test a bottom of $655 and resistance at $665.

This was weighing on Tokyo gold futures as well, he said.

The benchmark most-distant April gold contract on the Tokyo Commodity Exchange closed the morning down 5 yen per gram, or 0.2 percent, at 2,606 yen ($21.43), the high so far, recovering from a trough of 2,599 yen.

TOCOM gold has been wavering narrowly on both sides of 2,600 yen for about a week.

U.S. gold futures finished lower on Tuesday, hit by a higher dollar, weaker crude oil prices and chart-based sales.

The most-active gold contract for June delivery on the New York Mercantile Exchange settled down $3.90 at $659.90.

In the currency market, the dollar hit a three-month peak against the yen and hovered around a six-week high against the euro on Wednesday, on waning expectations that the Federal Reserve will cut interest rates later this year.

The dollar rose as high as 121.71 on electronic trading platform EBS in early Asian trade on Wednesday, its highest since Feb. 13.

It was at 121.55/121.58 yen in late New York trade.

Elsewhere on TOCOM, platinum touched a three-week low of 4,906 yen in profit taking, down about 2.6 percent from the all-time high of 5,039 yen marked on Monday.

Daiichi's Doi said TOCOM platinum's price could not be sustained above 5,000 yen, a level it breached on aggressive speculative buying.

''The view is that the market was way overheated,'' he said.

Benchmark April platinum futures contract recovered some of their earlier losses to close the morning down 15 yen at 4,937 yen per gram.

Spot platinum was at $1,287/$1,292, up slightly from New York levels of $1,285/$1,290 an ounce.

April TOCOM silver was down 2.5 yen per 10 grams at 506.6 yen.

Spot silver was largely flat at $12.91/$12.95 an ounce.

April TOCOM palladium was at 1,481 yen per gram, up 8 yen.

Spot palladium was at $371/$376 an ounce, down from $374/$378 in New York.

Precious metals prices at 0300 GMT Last Net Change Pct Move Turnover (lots) TOCOM Gold 2606.00 -5.00 -0.19 14772 TOCOM Platinum 4937.00 -15.00 -0.30 30513 TOCOM Silver 506.60 -2.50 -0.49 569 TOCOM Palladium 1481.00 8.00 +0.54 803 Spot Gold 659.20 Spot Platinum 1287.00 Spot Silver 12.91 Spot Palladium 371.00 Change so far in 2007 Metal Latest bid End prev year Pct Move TOCOM Gold 2606.00 2445.00 +6.58 TOCOM Platinum 4937.00 4254.00 +16.06 TOCOM Silver 506.60 493.30 +2.70 TOCOM Palladium 1481.00 1255.00 +18.01 Spot Gold 659.20 636.10 +3.63 Spot Platinum 1287.00 1132.00 +13.69 Spot Silver 12.91 12.85 +0.47 Spot Palladium 371.00 332.00 +11.75 Euro/Dollar $1.3456 Dollar/Yen 121.71 TOCOM prices in yen per gram, except for silver which is in yen per 10 grams, spot pricesin $ per ounce.

($1=121.57 yen) REUTERS SBA VV1144