Japan retail gold at 28-yr high above 4,000 yen/gram

* Japan retail price pushed higher by dollar gold strength

* Most Japan households still selling gold when price jumps

* Gold coin sales brisk, reflects growing investor appetite

TOKYO, March 7 (Reuters) - The Japanese retail price for gold rose to a 28-year high above 4,000 yen ($48.60) per gram on Monday as the dollar gold market neared its lifetime peak.

Spot gold XAU= was at $1,434.25 per ounce as of 0137 GMT, up $2.30 from late New York on Friday, and just below a record high of $1,440.10 struck last week. [GOL/]

Japan's largest bullion house, Tanaka Kikinzoku Kogyo, said its retail price rose on Monday to 4,021 yen per gram, which includes a 5 percent consumption tax, topping the 4,000 yen level for the first time since February 1983.

"The retail price climbed in tandem with the rise in the dollar gold price," a Tanaka Kikinzoku official said.

The Japanese retail gold price hit its highest in nearly 28 years on Dec. 7 at 3,997 yen per gram when gold scaled a historic high then.

The Tanaka Kikinzoku official said that while overseas investors were rushing to buy gold, as highlighted in the market rally and prices hitting new peaks, most Japanese households still sold their gold holdings when prices jumped.

"About 70 to 80 percent of them are bringing their gold holdings to us to sell. But recently, sales of our gold coins for investment purpose have been brisk," the official said.

The bullion house sells four types of gold coins for investment. The largest, weighing 1 ounce and worth 126,333 yen on Monday, was the most popular among the households, he said.

But some Japanese households have slowed their sales of gold to bullion dealers, resisting the temptation of record prices to hold out for greater profits in 2011 if international and domestic gold markets rally more. [ID:nL3E6NT00O]

Still, their tendency to sell on the price rise made Japan a net gold exporter for the fifth year in a row in 2010.

(Source: http://af.reuters.com/article/metalsNews/idAFTOE72601020110307?sp=true)