Tokyo gold futures jumped more than 2 percent to a three-month high on Friday on strong technical signals and short-covering after the cash price rose sharply in New York.
Overall sentiment for gold improved further as prices gained strongly in global markets the previous day on strong oil prices, a weaker dollar against the euro, and speculation that China could buy gold for its foreign currency reserves.
The key Tokyo Commodity Exchange gold contract for October 2007 delivery surged by its daily 60-yen limit to 2,430 yen a gram the highest for a benchmark contract since August 10 at the open, gaining just over 2.5 percent from Thursday's 2,370 yen. Prices were off highs on profit taking, but the underlying technical trend stayed bullish. The October contract closed at 2,418 yen, up 48 yen or 2.03 percent from Thursday.
It has risen 3.6 percent during the week. Other contracts closed up 34 to 57 yen. "The trend is up, and it seems the market is now targeting a high reached in May," Kageyama said.
A benchmark distant TOCOM gold contract reached a 20-year high of 2,587 yen on May 12. Key October TOCOM gold was more than 2 percent above the key trend line of 2,377 yen, which is the 7-day moving average. Cash gold matched a two-month high around $635 an ounce in Asian trade on Friday, carrying over the upturned set in New York the previous day.
Gold was trading at $632.75/633.50 an ounce, compared with $633.60/634.60 late in New York, where it gained about 3 percent. It has climbed as far as $635.50 in Asian trading on Friday.
Speculation that China could buy gold for its foreign currency reserves encouraged gold buying the previous day. China central bank governor Zhou Xiaochuan said China was considering many instruments to diversify its foreign exchange reserves, without elaborating.
Key October TOCOM platinum jumped by the daily 100-yen limit to its highest in almost two months as speculators bought back strongly after breaking through a closely watched chart point. October platinum closed at 4,437 yen a gram, up 2.3 percent from Thursday's settlement of 4,337 yen. It has climbed about 9 percent since a week ago.
All other platinum contract closed up by the 100-yen limit, except for the limitless front month contract, which ended 137 yen higher at a session high of 4,558 yen.
Speculative buying intensified after the October contract broke through the 100-day moving average of around 4,360 yen. On Wednesday, it had briefly climbed above its 100-day moving average for the first time since September 14, but failed to stay above that level. Key October TOCOM platinum was about 1.7 percent above the moving average as of Friday's close.
Comments
Comments are closed.