Tokyo gold futures finished lower on Thursday, pressured by a sell-off in New York and a weakness in the dollar on continuing tension in Iraq, brokers said.
Benchmark April gold on the Tokyo Commodity Exchange (TOCOM) settled down 14 yen per gram at 1,359, after trading between 1,358 and 1,362. Other months lost 12 to 16 yen.
After softer in a reflection of a weaker Comex finish, TOCOM gold extended losses in late afternoon as the dollar retreated.
News of an explosion near a military base in Baghdad added to the dollar's decline. "Jitters about the Middle East tensions could cap the topside of the dollar, despite a looming US interest rate rise, putting a ceiling on TOCOM prices," a Tokyo broker said.
Volume of TOCOM gold was light at 38,417 lots on Thursday, as investor participation was limited, brokers said.
"Investors showed scant buying interest in TOCOM gold, as they saw slim chances for profits because the market had been locked in a narrow band recently," another broker said. "Their attention is on more volatile energy futures markets."
August gold is expected to stay within the 1,350-1,400 yen range until fresh trading incentives emerge, he added.
Spot gold was quoted at $385.15/65 an ounce, up from New York's last quoted $384.50/385.00.
On Wednesday Comex August gold fell $3.50 to close at $385.20 an ounce, undermined by the strength in the dollar which added to its gains after an unexpected surge in US industrial output reinforced expectations of robust economic activity.
The dollar was at 109.55/61 yen, down from 110.00 yen in late New York trade.
Platinum futures ended lower on Thursday, giving up most of their gains made on the previous day, weighed down by yen-linked selling, brokers said.
Benchmark April 2005 platinum ended 21 yen per gram lower at 2,636, after trading between 2,619 and 2,649.
Other months were nine to 25 yen lower. Spot platinum was quoted at $773.00/778.00 an ounce, down from New York's $777.00/782.00. April platinum lost 322 yen or 11 percent from its life high of 2,923 yen, when it hit a one-month low of 2,601 yen on Tuesday.
Brokers expected the contract to test its life low of 2,557 yen if it failed to sustain the 2,600 yen level. Selling of TOCOM platinum accelerated this month amid views that fund operators, who led platinum's rally to a 24-year peak this year, will shift money out of the metals market to dollar-denominated assets on a possible US interest rate rise.
A rise in US interest rates would make dollar-denominated assets more attractive, which would boost demand for dollars. But a higher dollar makes precious metals more expensive for holders of other currencies.
Platinum sentiment was also dampened by a lack of physical buying recently by China, the world's largest consumer of platinum, and worries that China's measures to cool its overheating economy might hurt Chinese demand, brokers said.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.
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