>Spot gold steady on weaker USD, technicals

London - Spot gold held steady above a key psychological support Tuesday on dollar weakness and positive technicals.

Traders said gold was looking to equity and currency markets for cues that would help it extend its recent rally.

At 0934 GMT, spot gold was trading at USD902.75 a troy ounce, up 40 cents, or 0.04%, from 0000 GMT. Gold rallied to a one-week high Monday and closed above USD900/oz Monday, a mildly bullish near-term signal, traders said.

"After breaking the USD900 level, it should become support now," said Afshin Nabavi, head of trading and physical sales at Swiss bullion house MKS Finance. "I think overall people have to buy dips."

Nabavi said next resistances for gold were at USD909/oz and USD916/oz.

Light physical buying and fresh gold ETF investment were also giving gold some upwards momentum, traders said.

While physical buying has tailed off since gold touched a low of USD865 in mid-April, physical demand did provide a floor to prices and investors may try to keep gold above USD900 now that it has regained that support, said Commerzbank gold trader Michael Kempinski. "I think we'll try to defend USD900."

The stronger tone in gold came despite the ongoing recovery in global equity markets, which were up again overnight.

If gold continues to do well, investors may keep their money in gold rather than shifting it into equities, said Kempinski. Still, better economic data may not benefit gold as much as equities, as the threat of inflation is still far on the horizon, he said.

U.S. manufacturing data later Tuesday is expected to provide some impetus to gold, as should any news about the upcoming results of the U.S. government's stress tests for banks.

Spot silver was 0.5% higher at USD13.078/oz.

Spot platinum was unchanged at USD1,117/oz, and spot palladium fell 0.7% to USD216.50/oz.

Source: COMMODITIESCONTROL