LONDON, July 10: Gold eased from a one-month high on Tuesday as traders lightened positions ahead of a key speech by the Federal Reserve chairman, but selling was limited due to stronger oil and industrial metals prices.

Most commodity markets rallied the previous day, with leading indexes revisiting 2006 highs after crude oil hit an 11-month peak and copper a 2-month high.

Spot gold was at $661.45/662.05 an ounce, slightly up from $660.80/661.60 late in New York on Monday. Analysts said currency moves, notably dollar/euro, would be key to further gains, noting that gold had underperformed relative to the US currency's most recent bout of weakness.

But gold is on the cusp of where it might possibly break up rather than down, said Stephen Briggs, metals economist at Societe Generale investment bank.

Technical analysts said gold would need to get back to and sustain a move above $662.50 an ounce, followed by the tougher 100-day moving average level around $664.

Market commentators said data from U. exchange regulator CFTC showing speculative positions held by funds in New York gold futures were maybe not as positive as some had hoped.

The data showed that large speculators reduced both long and short positions as of July 3, leaving a net long position of just over 200 tons.

That said, Briggs noted there was still quite a large gross short position in the market, so prices could move quite quickly if traders covered this in the event of a jump higher.

Gold has generally been stuck in a broad trading range since February, touching an 11-month high at $693.60 in April and a low of $632.30 in March.

Three attempts to get back to the psychological $700 level have so far ended in failure, although many analysts believe this may still happen later in 2007.

Gold hit a 26-year peak at $730 in May 2006. The performance of gold was not too impressive during the first half of the year, a trader at a Japanese trading house said.

Platinum fell to $1,296/1,298 an ounce from $1,303/1,307 late in New York on Monday. Traders are waiting for further developments in wage negotiations in top producer South Africa.

Palladium edged down to $365/368 an ounce from $367/370 in New York, while silver edged up to $12.77/12.81 from $12.71/12.76 an ounce, having risen to its highest in nearly two weeks at $12.85 an ounce on Monday.—Reuters