* Gold steady near four-month high
* TOCOM gold strikes 25-year high as funds return
* Investors await Fed Chairman Bernanke's testimony
* Physical market sees sales of scrap
(Updates prices, adds activity in physical market)
By Lewa Pardomuan
SINGAPORE, July 15 (Reuters) - Gold was steady near its
strongest level in almost four months on Tuesday as surging oil
prices and financial market jitters boosted the metal's
safe-haven appeal.
A firm cash market and inflation worries lifted Tokyo gold
futures to their highest level in 25 years before profit taking
kicked in. Silver slipped but held near a four-month high above
the level of $19 an ounce it hit on Monday.
Gold <XAU=> hit a high of $972.70 an ounce before slipping
to $971.30/972.30 an ounce, barely changed from $971.20/972.20
in late New York trading. It jumped to $974.65 an ounce on
Monday, its highest level since March 19.
"Gold and silver both reflect fears of financial
instability in the U.S. banking sector," said William Kwan,
bullion director of Gold Capital Management in Singapore.
"$980 might just be a weak resistance ifgold continues its
strong upward trend.However, traders will be cautious ahead of
choppy price actions in gold near thepsychological $1,000
level."
Gold struck a lifetime high of $1,030.80 in March.
Gold's appeal as an alternative investment to stocks and
bonds has increased on worries about the future of Fannie Mae
<FNM.N> and Freddie Mac <FRE.N> despite the U.S. government's
pledge to support the nation's top mortgage finance firms.
"The rumours are out there in the market that there may be
more regional banks in trouble. That's obviously a concern for
the market and this has driven people into more hard
asset-based investments like gold," said Darren Heathcote of
Investec Australia.
Shares of major U.S. banks plunged on Monday amid fears
about the sector's stability following Friday's seizure by
regulators of IndyMac Bancorp as withdrawals by panicked
depositors led to the third-largest U.S. banking failure.
[]
In the physical sector, sales of gold scrap picked up in
Asia on Tuesday as jewellers and investors cashed in on
bullion's rise to a four-month high, putting pressure on
premiums. []
"I think we'll still get support coming in around the $950
level. On the top side, I
would suggest that it might be somewhere around the
$985-$986 level," said Heathcote.
The most active Tokyo gold contract for June 2009 delivery
<0#JPL:> on the Tokyo Commodity Exchange hit a high of 3,346
yen, its highest level since September 1983, before losing some
of the gains to profit taking.
Dealers await Bernanke's testimony before the Senate
Banking Committee on Tuesday to see how the latest developments
in the financial sector will affect his views on monetary
policy and the economy. []
The euro edged up to $1.5941, not far from the record high
of $1.6020 hit in April. Oil <CLc1> eased 5 cents to $145.13 a
barrel, but within sight of last week's record above $147.
<O/R>
Gold futures for August delivery <GCQ8> on the COMEX
division of the New York Mercantile Exchange fell $0.4 an ounce
to $973.3.
Silver <XAG=> edged down to $19.11/19.17 an ounce from
$19.12/19.18 late in New York on Monday, when it jumped to a
four-month high of $19.20 an ounce.
Spot platinum <XPT=> fell to $1,998.00/2,018.00 an ounce
from $2,012.00/2,032.00 late in New York. Spot palladium <XPD=>
slipped to $445.00/453.00 an ounce from $448.50/456.50 an
ounce.
Precious metals prices at 0632 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 971.30 -0.40 -0.04 16.64
Spot Silver 19.10 0.05 +0.26 29.32
Spot Platinum 1998.00 -14.00 -0.70 31.45
Spot Palladium 446.00 -1.50 -0.34 21.20
TOCOM Gold 3334.00 18.00 +0.54 8.95
60210
TOCOM Platinum 6745.00 -92.00 -1.35 26.33
25552
TOCOM Silver 656.20 10.50 +1.63 21.29
1566
TOCOM Palladium 1553.00 -12.00 -0.77 14.95
1311
Euro/Dollar 1.5945
Dollar/Yen 105.80
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
