TOKYO, Aug 14 (Reuters) Gold edged lower on Tuesday as the dollar reached a one-month high against

TOKYO, Aug 14 (Reuters) Gold edged lower on Tuesday as the dollar reached a one-month high against the euro, but the metal gained some support as uncertainty in credit and equities markets continued to draw safe-haven demand.

Investors were reluctant to sell gold heavily on expectations that cash gold's fall will be cushioned by physical buying from India and the Middle East when it falls below $660 an ounce, traders said.

''Gold will be vulnerable in the short term as price falls in credit and equity markets will affect prices, but in the long term gold will draw demand from investors,'' said Hiroyuki Kikukawa, associate director at Nihon Unicom Inc. in Tokyo.

''Gold should gain safe-haven appeal as mid-term and long-term funds are still in the market with the balance of gold exchange-traded funds staying at high levels.'' Spot gold fell to $668.60/669.10 an ounce as of 0245 GMT, from $669.50/670.30 late in New York, but off Friday's two week low of $658.10 an ounce.

StreetTRACKS Gold Shares , the world's largest gold-backed ETF by far, held 509.29 tonnes of gold, a shade lower that this month's record high of 509.60 tonnes.

Benchmark June 2008 gold futures on the Tokyo Commodity Exchange finished the morning session down 16 yen or 0.6 percent at 2,559 yen a gram.

Japanese investors locked in their profits as the yen strengthened against the dollar after the key contract jumped by more than 1 percent the previous day.

Metals traders will continue to watch the fate of financial and currency markets for direction in the precious metals market.

Gold is expected to find solid support on strong physical demand on price dips, but traders stayed nervous about taking large positions as long as jitters over U.S. subprime mortgage problems stayed, they said.

''The near-term resistance for spot gold is $677 and as long as gold trades below this level, a bearish tone will dominate,'' said Pradeep Unni, an analyst at Vision Commodity Services in Dubai.

''With stops at $677, rallies could be used as an opportunity to sell higher. A near-term direction is difficult to discern as long as gold trades between the key support and resistance levels,'' said Unni, who pegs support at $658.

The euro hit a one-month low against the dollar on Tuesday as the European Central Bank's hefty cash injections to the money market cooled expectations for a September interest rate increase in the euro zone.

The ECB injected 47.67 billion euros ($65.3 billion) into euro-zone money markets on Monday in a one-day tender to replace Friday's special three-day tender for 61.05 billion euros.

The euro hit a fresh one-month low against the dollar at $1.3602 on electronic trading platform EBS in early Asian trade.

The ECB and other central banks have been providing funds into the global banking system in the past one week to stave off a money market squeeze caused by growing jitters about bank and fund losses from U.S. subprime mortgage problems.

Platinum fell to $1,272/1,277 an ounce from $1,275/1,278 late in New York.

Silver edged down to $12.77/12.80 an ounce from $12.79/12.84 late in New York.

Palladium fell to $353/358 an ounce from $354/357.

Precious metals prices at 0245 GMT Last Net Change Pct Move Turnover (lots) TOCOM Gold 2559.00 -16.00 -0.62 29297 TOCOM Platinum 4793.00 -21.00 -0.44 13509 TOCOM Silver 487.20 -3.10 -0.63 674 TOCOM Palladium 1362.00 -3.00 -0.22 126 Spot Gold 668.60 Spot Platinum 1272.00 Spot Silver 12.77 Spot Palladium 353.00 Change so far in 2007 Metal Latest bid End prev year Pct Move TOCOM Gold 2559.00 2445.00 +4.66 TOCOM Platinum 4793.00 4254.00 +12.67 TOCOM Silver 487.20 493.30 -1.24 TOCOM Palladium 1362.00 1255.00 +8.53 Spot Gold 668.60 636.10 +5.11 Spot Platinum 1272.00 1132.00 +12.37 Spot Silver 12.77 12.85 -0.62 Spot Palladium 353.00 332.00 +6.33 Euro/Dollar $1.3618 Dollar/Yen 117.87 REUTERS MP VC1140