Tokyo gold futures dipped on Monday, tracking New York Comex gold's decline, but later regained some ground to trade near the three-month high marked late last week, supported by underlying firm sentiment.
The benchmark most-distant October 2007 gold contract on the Tokyo Commodity Exchange finished down 7 yen per gram at 2,411 yen, after trading in a range of 2,398 yen and 2,413 yen. Other months fell by four to 13 yen. Spot gold's strength due to a weak dollar buoyed TOCOM gold. A weaker dollar makes dollar-priced gold cheaper for holders of other currencies.
"Spot gold isn't trading below $620 and that's a positive factor for TOCOM gold," a Tokyo broker said. If the view is for a further decline in the dollar's value, then spot gold could trade in a range of $640-$650 in the near term, he said.
TOCOM gold will then probably continue to trade at 2,400 yen or higher, he said. On Friday, TOCOM gold rose by its daily 60-yen limit to 2,430 yen, the highest for a benchmark contract since August 10.
It closed at 2,418 yen, up 48 yen, as profit-taking shaved some of the gains, but sentiment remained firm due to strong technical signals. Speculation that China might buy gold for its foreign currency reserves also lent strength to the market. Spot gold was fetching $631.25/$632.00 an ounce, compared with $627/$628 last quoted in New York.
Bullion rebounded on Monday, hovering near the a two-month high of around $636 an ounce hit last week after the US dollar dropped against other currencies and selling in Japanese futures subsided. The dollar was under pressure after People's Bank of China Governor Zhou Xiaochuan reiterated that Beijing planned to diversify its estimated $1 trillion in reserves. In New York on Friday, gold futures closed down 1 percent. December gold at the Comex division of the New York Mercantile Exchange settled $6.70 lowers at $630.10 an ounce.
In the currency market, the dollar slipped on worries that central banks might gradually shift their foreign exchange reserves away from the currency. The dollar was fetching 117.30/117.33 yen, against 117.53/117.56 yen in late New York trade. Elsewhere on TOCOM, platinum traded within a tight band ahead of the release of UK precious metals refiner Johnson Matthey Plc's demand outlook for the metal, which is used in jewellery and automobile catalytic converters.
The report is due out on Tuesday. Platinum, more than other precious metals, has been sensitive to forecasts of demand and supply, traders said. Benchmark October 2007 platinum futures contract closed down two yen at 4,435 yen per gram after moving between 4,406 yen and 4,440 yen. Spot platinum was at $1,208/$1,213, compared to New York levels of $1,206/$1,212 an ounce.
Comments
Comments are closed.