By Chikako Mogi TOKYO (Reuters) - Gold inched down on Wednesday after hitting a two-month high the previous day, with investors pondering whether to push prices up if the dollar weakens further as they become more wary of high price levels. After breaking above a key resistance level that had held for most of this year on Tuesday, and with other commodities such as oil and base metals gaining strongly while Asian stocks and the euro hit year-highs, gold is on an uptrend as funds pour money into a broad range of assets. By some technical measures, such as gold's relative strength index (RSI), the market is becoming top-heavy while players are growing cautious about liquidity thinning out during the summer holidays, which could mean sharper swings in prices. The RSI, a measure of whether the metal is overbought or oversold, stood at around 69. The market views an RSI of 30 or less as oversold and 70 or more as overbought. The index topped 70 when the spot market tested resistance of $955-$960 per ounce in the past three weeks, but held above that level for just a few days when the spot rate neared $1,000. "Market momentum is clearly on an upswing, giving the upper hand to trend technicals over an oscillator analysis such as RSI," said Shuji Sugata, a manager at Mitsubishi Corp Futures and Securities. "Stabilising markets across assets reduce gold's attraction as a safe haven, as reflected in falling gold ETFs, but such a negative aspect is overshadowed by the focus on speculative funds flowing into markets broadly," he said. Spot gold was down 0.3 percent at $963.85 per ounce as of 0540 GMT, compared to New York's notional close of $966.75 per ounce. Spot gold rose to a two-month high of $970.05 on Tuesday. U.S. gold futures for December delivery fell 0.3 percent to $966.5 per ounce, compared with $969.70 an ounce on the COMEX division of the New York Mercantile Exchange. Gold futures rose above $970 to a two-month high on Tuesday. Sugata said gold would likely keep drawing support from the euro's continuing strength after it topped $1.43. The dollar hovered near its 2009 low against the euro on Wednesday. The euro hit a year-high of $1.4445 earlier in the week. Traders said while momentum may be building for gold to test highs near $1,000 reached in early June, caution was warranted over any slowing up in gains in stocks and commodities. Investor demand for gold-backed exchange-traded funds remained weak, with holdings of the world's largest such fund, the SPDR Gold Trust, steady at 1,072.87 tonnes as of August 4. Holdings of the world's largest silver-backed exchange-traded fund, the iShares Silver Trust, fell 3.47 tonnes or 0.04 percent to 8,824.67 tonnes as of August 4 after hitting a record 8,828.14 tonnes on July 31. Japanese stocks eased 0.1 percent while Asian stocks outside Japan were marginally higher. | 
