Gold retreats from recent rally, TOCOM gains

TOKYO, June 4 (Reuters) Gold fell on Monday, taking a breather after rising more than $10 an ounce to a two-week high on Friday, while Tokyo gold futures extended gains into the fourth session.

On Friday, gold climbed as high as $671.95, the highest since May 16, as a rise in crude oil prices and a faster-than-forecast growth in U.S. jobs fanned concerns about inflation.

Analysts said cash gold may retreat a little further before reversing its course.

Kaname Gokon, deputy general manger at Okato Shoji Co.'s research section, said gold's initial supports were seen at $666 and then $662, and whether these levels were protected would depend on the euro/dollar rate.

''The momentum in the precious metals is somewhat maintained as there are strong views that the recent fall in the euro/dollar rate will be correct sooner rather than later,'' he said.

''Silver's rally, in particular, had reflected buying from those who have such views,'' Gokon said.

Spot silver hit a five-week high of $13.69 an ounce on Friday despite a fall in the euro to an eight-week low versus the dollar. Silver stayed near that level on Monday.

As of 0324 GMT, spot gold was trading at $668.80/670.30 an ounce, down from $670.10/671.60 late in New York on Friday.

Silver traded at $13.65/13.69, little changed from $13.67/13.70 in late New York on Friday.

The euro was around $1.3445 on Monday, mostly flat from U.S. trade on Friday and off an eight-week low of $1.3392 hit late last week.

The benchmark gold futures contract for April 2008 delivery on the Tokyo Commodity Exchange rose 0.8 percent to 2,652 yen a gram by midday.

It rose as high as 2,658 yen, a three-week high, up 28 yen or 1.1 percent from the previous close.

Short-covering played a part in the rally on the TOCOM market, helped by recent weakness in the yen versus the dollar.

A weaker yen inflates yen-based TOCOM prices.

Cash platinum was at $1,289/1,294 an ounce, almost flat from $1,288/1,293 in New York on Friday.

Palladium edged up to $371/376 an ounce from $369/373 in New York.

Precious metals prices at 0327 GMT Last Net Change Pct Move Turnover (lots) TOCOM Gold 2652.00 22.00 +0.84 41692 TOCOM Platinum 4991.00 -4.00 -0.08 29135 TOCOM Silver 536.20 6.10 +1.15 2238 TOCOM Palladium 1486.00 6.10 +0.47 1015 Spot Gold 668.70 Spot Platinum 1289.00 Spot Silver 13.65 Spot Palladium 371.00 Change so far in 2007 Metal Latest bid End prev year Pct Move TOCOM Gold 2652.00 2445.00 +8.47 TOCOM Platinum 4991.00 4254.00 +17.32 TOCOM Silver 536.20 493.30 +8.70 TOCOM Palladium 1486.00 1255.00 +18.41 Euro/Dollar $1.3444 Dollar/Yen 121.95 TOCOM prices in yen per gram, except for silver which is in yen per 10 grams, spot prices in $ per ounce.

REUTERS PV DS1138