PRECIOUS-Gold eases as dollar steadies; silver gathers pace

                                
 * Gold eases for a second day; support from Japan
                                
 * Gold/silver ratio drops again
                                
 * Coming Up: U.S. ICSC chain stores; 1145 GMT
                                
 
                                
 (Updates throughout with comment, details; refreshes prices)
                                
 By Amanda Cooper
                                
 LONDON, April 12 (Reuters) - Gold fell for a second day on
Tuesday, under pressure from a steadier dollar after having hit
record highs on Monday, while a warning from Japan about the
severity of its nuclear crisis fed modest safe-haven demand.
                                
 Goldman Sachs' decision on Monday to book profits on its
positions in crude oil, copper, platinum and some agricultural
commodities weighed on the raw materials sector, including gold.
                                
 The correlations between gold and the dollar index <.DXY>
and gold and the Standard & Poor's 500 index <.SPX> reached
their most negative in nearly three months, meaning any rise in
the U.S. currency will weigh more heavily on the gold price.
                                
 Federal Reserve officials, Janet Yellen and William Dudley,
said the central bank should stick to its super-easy monetary
policy, with inflation not a threat and unemployment too high.
[ID:nN11296347]
                                
 Spot gold <XAU=> was last down 0.3 percent at $1,462.60 an
ounce by 0907 GMT, having fallen earlier by as much as 0.9
percent to a session low at $1,453.31. On Monday, gold hit a
record $1,476.21. 
                                
 U.S. gold futures for June <GCM1> fell 0.3 percent to
$1,464.50.
                                
 Adding to potential support for gold was Japan's decision to
raise the severity of its nuclear disaster to the highest level.
[ID:nL3E7FB2TZ]
                                
  "When we look at gold, we see its correlation to the S&P
500 is quite strong and the VIX is off its March highs, so it's
not so much a safe-haven play as it is a pure dollar play," said
VTB Capital analyst Andrey Kryuchenkov.
                                
 "If this was safe-haven buying, you wouldn't see silver so
much stronger than gold, this just shows the spec money is going
into silver," he said, adding the crisis in Japan would likely
maintain a bid for gold, which boasted strong support at $1,450.
                                
 The gold/silver ratio fell to its lowest since at least 1989
on Tuesday, reflecting silver's outperformance relative to gold.
                                
 
                                
 GOLDMAN TAKES PROFITS
                                
 Goldman Sachs' decision on Monday to close its long
positions in copper, crude, platinum and some agricultural
commodities initially rattled some of the positive sentiment
towards these more growth-linked assets.
                                
 The bank, which is one of the largest players in the
commodity markets, maintained its recommendation to hold long
positions in U.S. December 2011 gold futures <GCZ1>, based on
its view U.S. rates will remain low for an extended period.
                                
 Goldman noted "nascent signs of oil demand destruction in
the United States" that could drag prices down, as well as the
possibility of a Libya ceasefire. Nigeria's elections, which had
added further risk to oil markets, had thus far not caused
supply disruptions, it added. [ID:nN11303064]
                                
 The threat to global inflation from higher energy prices has
been one of the driving forces behind the rise in gold, which
can help investors hedge against higher price pressures.
                                
 The International Monetary Fund on Monday said soaring oil
prices and inflation in emerging economies pose new risks to
global recovery but are not yet strong enough to derail it.
[ID:nN08193089]
                                
 "Gold should remain in demand as a safe haven in any case
and the price should be well supported. Speculators and
jewellery traders are likely to see lower prices as an
attractive buying opportunity," said Commerzbank.
                                
 Holding of gold in the SPDR Gold Trust <GLD>, the largest
gold exchange-traded fund, were unchanged for a third trading
day on Tuesday, leaving global holdings of metal at 64.322
million ounces, up 1.55 million ounces so far this week and up
2.5 percent so far this month. [GOL/ETF]
                                
 Silver <XAG=> rose by nearly 1 percent to $40.56 an ounce,
having fallen on Monday by over 1.6 percent after the Goldman
note prompted a sell-off in industrial metals. Silver is more
than 4 percent below Monday's 31-year high at $41.93.
                                
 Platinum <XPT=> was up 0.4 percent at $1,789.00 an ounce,
partially paring some of Monday's 1.7 percent loss, while
palladium <XPD=> was up 0.4 percent at $784.00.
                                
 (Additional reporting by Lewa Pardomuan in Singapore;
editing by Alison Birrane)