Tokyo gold futures inched down on Thursday as falls in oil prices and the cash gold price induced sales following a two percent gain the previous day, but healthy technical trends limited heavy liquidation.
Tokyo Commodity Exchange gold futures were under pressure but were confined to a tight range as traders were reluctant to take new positions following on Wednesday's gain amid a dearth of buy factors.
"Gold doesn't have a distinct direction. Weak oil prices are applying some pressure but basically it's still supported, especially after this week's gains," said Kaman Goon, research section manager at Okapi Shoji Co Ltd.
Benchmark TOCOM gold futures, currently August 2007, closed at 2,414 yen a gram, down 3 yen or 0.12 percent from Wednesday. They moved in a range of 2,402 to 2,415 yen. TOCOM gold prices fell broadly, tracking losses in New York the previous day.
Cash gold was little changed in Asian trade on Thursday after rising above $640 on Wednesday. Gold was trading at $633.90/634.90 an ounce, up from $633.60/634.60 late in New York on Wednesday, when it rose to its highest in nearly a month at $640.25.
Bearish oil prices and a slight recovery in the dollar weighed on gold prices. Key US crude oil futures slumped near a three-month low, holding below $68 ahead of weekly US stocks figures that are expected to show supplies are ample amid a seasonal dip in demand. Falls in oil prices weaken demand for gold, which is often used an inflation hedge instrument.
The dollar rose on Wednesday, reflecting data showing a surprisingly big jump in US labour costs that were seen as suggesting the Federal Reserve may have to raise interest rates more.
Gold lacked distinct buying factors but was expected to be supported as jewellery demand from the Middle East and India is expected to grow ahead of festival seasons. "The basic short-term trend is strong, but for now there is profit taking pressure around $640," said Shoji Sugata, assistant manager at Mitsubishi Corp.
Futures and Securities Ltd. For direction, dealers will also focus on a meeting of senior diplomats from six world powers in Berlin to discuss what to do about Iran after it ignored a UN Security Council deadline to freeze its nuclear enrichment programme.
The stand-off between Iran and the West over Tehran's nuclear ambitions was among factors, which helped gold rise to a 26-year high of $730 an ounce in, mid-May.
Tehran rejects Western accusations that it is trying to develop the capability to produce atomic weapons and insists it only want nuclear fuel to peacefully generate electricity.
TOCOM platinum futures rebounded from lows on bargain hunting after prices fell mildly. "TOCOM platinum is leading the overall upturned. There is a lot of buying interest as bullish technical are drawing attention," Mitsubishi's Sugata said.
Investors and investment funds have been buying the white precious metal as technical trends turned bullish, especially in the past week. August platinum closed up 22 yen or 0.47 percent at 4,709 yen a gram. It had moved in a range of 4,668 to 4,711 yen. On Wednesday, key August TOCOM platinum reached a record high of 4,734 yen, topping a high hit on September 1. The previous record high was set in May.
Comments
Comments are closed.