* Japan intervenes in yen market, driving up dollar
* Gold could rise to $1,679 -technicals
* Coming up: U.S. initial jobless claims; 1230 GMT (Writes through; adds details; updates prices)
By Rujun Shen
SINGAPORE, Aug 4 (Reuters) - Gold, pressured on Thursday by a surging dollar as Japan intervened to rein in its currency, scaled back earlier gains but remained firmly supported by worries about the widening euro zone debt crisis and slowing global growth.
"Gold seems to have wings at the moment as there are lots of macro and sovereign debt uncertainties," said David Thurtell, an analyst at Citigroup.
"The price of $1,700 seems easy in the current climate, and the market is probably targeting $2,000 now."
Spot gold eased from an intra-day high of $1,668.76 to $1,662 an ounce by 0625 GMT, little changed from the previous close. It hit a record of $1,672.65 in the previous session.
U.S. gold
The yen tumbled as Japan intervened to curb the strength of its currency, sending the dollar surging 3 percent against the yen and gaining nearly 0.8 percent versus a basket of currencies .
Japan's move came a day after Switzerland unexpectedly cut interest rates to counter the rally of Swiss franc, to which investors have flocked for security from a spreading euro zone debt crisis and a shaky global economic outlook.
The same sentiment has helped drive gold to nine record highs in the past three weeks.
Technical analysis suggested that gold could rise to $1,679 an ounce in the short term, said Reuters market analyst Wang Tao.
The Relative Strength Index, or RSI, for gold, climbed to near 75, its highest since the end of April during bullion's previous record-setting rally. An RSI reading above 70 indicates the market is overbought.
The European Central Bank is expected to halt its rate hike cycle and probably signal a readiness to buy bonds again, as investors closely watch Spain's bond auction later in the day.
Investors are also eyeing the key U.S. payrolls data for July due on Friday, after a recent spate of disappointing data, including slowing manufacturing sector growth and faltering consumer spending fueled fears of deteriorating economic conditions.
Holdings in the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose for a second day straight to 1,286.30 tonnes on Wednesday, highest since late December.
The amount of gold held by the fund grew nearly 7 percent since the beginning of July, compared to a 6-percent, or 72-tonne, outflow in the first half of the year.
Recent reports of central banks' gold purchases reassured investors that gold's bull run may have a long way to go.
"Gold is not a punters' market, as there's real demand but not just hot money that drives prices higher," said a Singapore-based trader.
"Every dip has found pretty secure demand, and I don't know if we are going to see the long-awaited brutal sell-down people seem to have been anticipating."
Spot silver rose as high as $42, matching a three month high set on Wednesday. Silver is far from breaking its record of $49.51 set at the end of April, but led the precious metals complex with a gain of 35 percent so far this year. It lost 0.2 percent to $41.59.
Spot gold has risen about 17 percent so far this year.
Precious metals prices 0625 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1662.00 1.30 +0.08 17.09 Spot Silver 41.59 -0.09 -0.22 34.77 Spot Platinum 1757.00 -19.50 -1.10 -0.59 Spot Palladium 782.00 -8.95 -1.13 -2.19 TOCOM Gold 4242.00 114.00 +2.76 13.76 161108 TOCOM Platinum 4535.00 23.00 +0.51 -3.43 20155 TOCOM Silver 105.40 4.60 +4.56 30.12 2281 TOCOM Palladium 2020.00 -50.00 -2.42 -3.67 840 Euro/Dollar 1.4303 Dollar/Yen 79.33 TOCOM prices in yen per gram. Spot prices in $ per ounce. COMEX gold and silver contracts show the most active months (Editing by Clarence Fernandez)