* Gold steady; momentum may carry it to new highs in June
* Japan PM resignation sinks yen, lifts TOCOM gold
* Technical point to short term easing to $1,215 []
* Coming Up: U.S. pending home sales for April, 1400 GMT
By Nick Trevethan
SINGAPORE, June 2 (Reuters) - Gold prices were steady early
on Wednesday, consolidating the previous session's 1 percent
rally on safe-haven buying on persistent worries about Europe's
banking sector.
Sentiment was weighted towards higher bullion prices,
analysts said, with a chance of challenging last month's record
high of $1,248.95 on momentum from investment demand.
"Gold has seen a very strong move to the upside from the
lows around $1,170 in late May. People on Main Street are
buying more gold bars, coins and ETFs. There is a lot of
momentum," said Peter McGuire, managing director of CWA Global
Markets.
"We could see $1,265 this month as we grind higher and
there are geopolitical tensions that could send things far
higher -- Korea, Israel and Iran."
Spot gold <XAU=> fell 80 cents to $1,223.50 an ounce by
0326 GMT from New York's notional close on Tuesday, when prices
touched their highest in almost two weeks above $1,230 after
ECB warnings about the threats faced by Europe's banking
sector.
Investors pushed more money into gold-backed securities on
Tuesday. The world's largest gold-backed exchange-traded fund,
the SPDR Gold Trust <GLD>, said its holdings totalled 1,268.234
tonnes as of June 1 versus 1,267.930 tonnes on May 27, setting
a record high. []
Technically, gold may retrace to $1,215 in the near term as
strong resistance is observed at $1,229.49 -- the 76.4 percent
Fibonacci retracement level on the move from $1,248.95 to
$1,166.50.
For a related graphic, click:
http://graphics.thomsonreuters.com/gfx/WT_20100206090322.jpg
Bearish divergence appeared on the RSI indicator when gold
struggled to rise from $1,202 and managed to touch a high at
$1,230.20 during the previous trading session.
TOCOM gold futures <JAUc6> rose 0.6 or 23 yen per gram to
3,613 yen, ticking higher after news that Prime Minister Yukio
Hatoyama intends to resign sent the yen lower. []
"It's just the currency rate's fluctuation which moved up
TOCOM gold prices," said Koichiro Kamei, managing director at
Tokyo-based researcher Market Strategy Institute Inc.
"A possible scenario in favour of gold here would be if
Hatoyama's Democratic Party fails to maintain its grip on power
after the upcoming election on July 11 and boosts political
uncertainty. That could increase the appetite for gold from
Japanese retail investors, who have been willing to sell at the
current high prices."
Silver <XAG=> rose 7 cents or a third of a percent to
$18.44 an ounce, while platinum <XPT=> and palladium <XPD=>
gained more than half a percent.
Precious metals prices at 0326 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1223.50 -0.80 -0.07 11.66
Spot Silver 18.44 0.07 +0.38 9.57
Spot Platinum 1554.75 9.75 +0.63 5.98
Spot Palladium 458.00 3.50 +0.77 12.95
TOCOM Gold 3613.00 23.00 +0.64 10.86
35577
TOCOM Platinum 4599.00 -9.00 -0.20 4.98
16202
TOCOM Silver 54.90 -0.10 -0.18 6.19
401
TOCOM Palladium 1356.00 -9.00 -0.66 16.39
466
Euro/Dollar 1.2239
Dollar/Yen 91.55
(Additional reporting by Risa Maeda in TOKYO; Editing by
Himani Sarkar)
