By Amanda Cooper

 LONDON, Dec 7 (Reuters) - Gold hit record highs for a second
successive day on Tuesday, driven by fund buying ahead of the
end of the year, the prospect of more U.S. monetary easing and
investor nervousness over the European debt crisis.

 Silver hit a 30-year high for the seventh consecutive day,
driven by a weakening dollar and a push into commodities by the
investment community ahead of the end of the year. Gold in euros
also hovered near record highs as tension on the bond markets
ran high.

 Spot gold rose to an all-time high at $1,428.15 an
ounce before tracking back to $1,427.09 an ounce at 1155 GMT, up
from $1,422.85 the day before and on course for a third
consecutive daily gain.

 U.S. gold futures for February delivery GCG1 were up $10.70 an ounce at $1,426.80. 


 

Spot gold fell $1.15 to $1,421.70 an ounce by 0647 
GMT after hitting a record around $1,427 on Monday in thin 
trade.	

 "There doesn't seem to be any follow through buying, so 
you can say gold is attracting some year-end profit taking. 
This is a sign of consolidation," said Ronald Leung, director 
of Lee Cheong Gold Dealers in Hong Kong.	

 "There's no change in sentiment ... cautiously bullish."	

 A bullish target at $1,435 an ounce for spot gold 
is intact as the rise to a record high in the previous session 
confirmed an extension of the current wave development, 
according to Reuters technical analyst Wang Tao.	

 Gold's role as a hedge against inflation got a boost after 
Federal Reserve Chairman Ben Bernanke said on Sunday the bank 
could buy more than the $600 billion in U.S. government bonds 
it has committed to purchase. 

 "We've seen some retracement but I would still think 
fundamentals are strong and we've lost confidence in paper 
money," said a dealer in Hong Kong.	

 "I think the market will keep this momentum in the next 
few days and after that we will reach another record high."	

 Silver slipped below $30 an ounce before rebounding 
and hitting a high of $30.25, matching a 30-year high hit on Monday on European debt woes. 

Dealers in Hong Kong said silver was catching up with 
gold, while those in Tokyo said the metal was supported by 
physical buying from the industrial sector.	

 The world's largest silver-backed exchange-traded fund, 
iShares Silver Trust, said its holdings rose to 10,816.69 
tonnes by Dec. 6 from 10,778.68 on Dec. 2. The holdings jumped 
to an all-time high of 10,893.68 tonnes on Nov. 23. 

 U.S. gold futures for February rose $6.5 to $1,422.6 an ounce.	

 * Gold seen up to $1,435/oz-technicals

 * Coming Up: U.S. Employment index Nov; 1500 GMT

 (Updates prices, adds details)	

 By Lewa Pardomuan	

 SINGAPORE, Dec 6 (Reuters) - Gold edged down on Monday 
after rising nearly 2 percent in the previous session to above 
$1,400 an ounce, but a struggling U.S. dollar could still spur 
buying from investors.	

 Silver jumped to its strongest since early 1980, 
tracking the price of gold which could rally again on any 
signs of a weaker U.S. economy or if tensions between the two 
Koreas flare up again.	

 South Korea started on Monday a nation-wide live-fire 
naval exercise, despite Pyongyang's warnings against 
conducting the drills in disputed waters off the west coast of 
the peninsula.

 "Looking at the relatively strong rise in gold following 
the numbers on Friday, the market seems to be taking a bit of 
a breather," said Darren Heathcote, head of trading at Investec Australia in Sydney.
 "We might well drift through for a short time."	
 Spot gold fell $2.45 an ounce to $1,411.90 by 0253 
GMT after rising as high as $1,415.36 on Friday as the dollar 
tumbled following disappointing jobs data in November. 
 Bullion hit a record high around $1,424 an ounce in 
November.	
 Cash gold may rise further towards $1,435 an ounce 
as a new labeling of its wave pattern suggests a potential 
extension of the current rally, according to Wang Tao, who is 
a Reuters market analyst for commodities  and energy technicals	
 For a 24-hour gold technical outlook:	
 
 U.S. gold futures for February rose $7.1 an ounce 
to at $1,413.35 an ounce.    	
 The dollar was on the defensive on Monday after the U.S. 
Federal Reserve said it was open to injecting more funds into 
the economy, while investors took a breather after having 
pushed Asian stocks to three-week highs.  	
 Gold had seen a bit of buying related to the tension in 
the Korean peninsula after North Korea's artillery attack on a 
southern island last month, although investors were paying 
more attention to the debt crisis in Europe and talk about 
another round of U.S. quantitative easing.	
Fed chairman Ben Bernanke was reported in an interview with 
CBS television as not ruling out further bond purchases beyond 
the $600 billion already announced. [ID:nN05181474] 	
  "I think we are watching the tensions in Korea, and 
whether China will hold talks on this issue. You can say the 
U.S. economy will recover only very slowly, so if there's no 
change, there will be a second round of quantitative easing," said a dealer in Hong Kong.	
"I think sentiment in gold is still bullish. We are 
waiting to break a new high. We are seeing more buying from 
investors than from jewellers."   	
 The world's largest gold-backed exchange-traded fund, SPDR 
Gold Trust , said its holdings slipped to 1,298.030 
tonnes by Dec 3 from 1,298.447 on Dec 2. The holdings hit a 
record at 1,320.436 tonnes on June 29. 	
 The Nikkei average inched lower on Monday after weak U.S. 
jobs data and a renewed focus on U.S. quantitative easing 
pushed the dollar down against the yen, encouraging 
profit-taking in Tokyo stocks after they hit a six-month high 
last week. 
  Precious metals prices at 0251 GMT                                 
  Metal             Last    Change  Pct chg  YTD pct chg  Turnover   
  Spot Gold        1411.90   -2.45   -0.17     28.86                 
  Spot Silver        29.74    0.38   +1.29     76.71                 
  Spot Platinum    1730.24    4.74   +0.27     17.94                 
  Spot Palladium    770.72   12.32   +1.62     90.07