Tokyo platinum futures tumbled to a two-week low on Thursday on heavy liquidation by fund operators given the dollar's broad-based upturned amid increasing prospects of an interest rate rise in the United States.
Late rounds of selling hammered platinum futures on the Tokyo Commodity Exchange (TOCOM) by their 80 yen limit almost across the board as traders eagerly slashed their positions.
Yen-based platinum futures were pulled down in line with the dollar-based spot price due to the greenback's renewed upturned after upbeat comments by Federal Reserve Chairman Alan Greenspan's on the US economy increased expectations of credit tightening.
"Technical trends deteriorated rapidly after (the key platinum futures) closed below 3,100 yen yesterday and the market carried that mood over today," said Shoji Sugata, assistant manager at Mitsubishi Corp Futures Ltd.
"Fund operators are still showing interest in cutting their positions to reflect recent plunges," Sugata said. "The market is watching whether the key distant contract can sustain 2,900 yen in the near term."
The key February platinum futures contract closed down its 80 yen limit at 2,926 yen per gram the lowest since April 8.
The key contract was down about 6.4 percent from a fresh 16-1/2 year high of 3,127 yen hit on Monday and Tuesday.
Although the US central bank chief also made slightly dovish remarks on Wednesday, the dollar retained it's upturned against major currencies.
Greenspan told a congressional committee on Wednesday that inflation was not yet a worry, changing his tone a little from the previous day, when he had declared the threat of deflation a major reason behind low interest rates was over.
The dollar peaked at $1.1785 per euro in Tokyo trade, breaking through the key $1.18 support level to its highest point since late November.
The dollar stood around $1.1804/08 against the euro.
TOCOM silver futures suffered from relentless liquidation, falling in line with the dollar-based spot price. The key February silver contract fell a daily 12-yen limit for the second straight day. It closed at 218.4 yen per 10 grams.
It has dropped about 22 percent since hitting a high of 279.9 yen on April 9.
"We all knew that silver was overbought and traders are now heavily liquidating their positions," a trader at a Japanese commodity-trading house said.
"(TOCOM) silver may find support if spot silver manages to hold above $6," the trader said.
Spot silver fell to $6.14/$6.17 per ounce from late New York levels of $6.26/$6.29.
The February TOCOM gold contracts fell three-yen to 1,375 yen. Other contracts closed up one yen to down four-yen. Spot gold was quoted at $391.00/$391.75 an ounce against $390.00/$390.75 in New York.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.
Comments
Comments are closed.