Tokyo gold futures edge up

Tokyo gold futures staged a modest rally on Monday, supported by gains in New York and a soft yen, but trade was thin and rangebound ahead of this week's Federal Reserve policy meeting.
The benchmark April gold contract on the Tokyo Commodity Exchange finished up 10 yen per gram at 2,211 yen, after moving in a range of 2,207 yen to 2,217 yen. Other months rose by nine to 14 yen. "The mood is to wait and see what happens at this week's (Fed) meeting," a Tokyo analyst said.
He said that although most expect the Fed raise interest rates by another quarter percentage point, investors would probably wait until the meeting is over before making their next move.
Many in the markets were waiting to see the Fed.'s statement at the end of the two-day meeting on Thursday for clues about whether it will keep raising rates to stave off inflation. Higher interest rates typically support the dollar but diminish gold's allure as an alternative asset.
The pre-Fed vigil has also lead to thin trading volume: Total gold turnover on TOCOM was estimated at modest 58,907 lots, well down from Friday's 98,580 lots. The benchmark TOCOM contract has now risen about 6.4 percent from the 14-week low of 2,079 yen marked on June 15, but it remains far below the 20-year high of 2,587 hit on May 12.
In the spot market, gold was fetching $584.30/$585.00 an ounce at TOCOM's closing bell, compared with $582.80/$583.50 last quoted in New York on Friday. The firm price of crude oil, which continued to trade above $70 a barrel due to firm demand from the United States and China, was also a factor attracting investors to gold, a common hedge to inflation.
Gold futures finished with modest gains in New York on Friday, boosted late in the session by short covering fuelled by a higher oil price. August-delivery gold climbed $2.60 to settle at $588 an ounce, or up 0.44 percent.
In the currency market, the dollar was holding near two-month highs against the yen and the euro on growing expectations that the Fed will lift rates again in August after an anticipated hike this week.
The dollar was fetching 116.47/116.50 yen, against 116.52/116.54 yen in late New York trade. Most other TOCOM precious metals rose, including silver. April TOCOM silver finished at 380.1 yen per 10 grams, up 4.6 yen. Spot silver was flat at $10.30/$10.40 an ounce.