By Lewa Pardomuan SINGAPORE (Reuters) - Gold extended losses on Wednesday as the U.S. dollar held gains against other currencies, reducing the metal's appeal as an alternative investment, but the fall was cushioned after oil steadied from a more than $3 drop the previous day. Gold has lost more than 14 percent in value since spiking to an all time high of $1,030.80 an ounce in mid-March. Platinum briefly touched $2,000 as selling subsided in Tokyo. Spot gold was at $878.65/879.65 an ounce at 0540 GMT, down from $882.90/884.10 an ounce late in New York on Tuesday, when it dropped almost 1 percent. "It's still on a one-month gradual uptrend, so I am looking at the $870-$875 support as a key indicator for gold's direction. A movement below this could see prices heading back to the $845-$850 region," said Adrian Koh, analyst at Philip Futures in Singapore. "Upside, I will be looking at $900-$905 to provide some resistance," he said. The dollar hardly moved but held onto gains against the euro and other major currencies after Federal Reserve Chairman Ben Bernanke issued an explicit warning about the inflationary threat from a weak U.S. currency. Oil steadied above $124 a barrel on Wednesday as traders awaited U.S. data expected to show rising oil stocks. "I would say gold is still in a range of $850 to $900 for the time being, and we are all waiting for Friday's U.S. nonfarm payrolls data," said a dealer in Hong Kong. "Jewellery makers are covering shorts but it's not great because the market has not stabilised yet," he said. The August gold contract on the COMEX division of the New York Mercantile Exchange fell $2.1 an ounce to $883.4 an ounce. Platinum was volatile, with early selling dragging down the price to as low as $1,980.50 an ounce before bargain hunters emerged. Platinum firmed to $1,998.00/2,008.00 ounce from $1,992.50/2,012.50 late in New York, having earlier hit a high of $2,000 an ounce. The benchmark April 2009 platinum contract on the Tokyo Commodity Exchange fell 48 yen per gram to 6,626 yen. "For platinum, nearby support should be around $1,940-$1,950, resistance around $2,070," said Koh of Philip Futures. Palladium was at $429/434 an ounce, barely changed from $429/437 late in New York. Silver eased to $16.72/16.79 an ounce from $16.77/16.84 late in New York. | 
