Tokyo gold futures regained strength on Friday as the weakness of the dollar and spot gold's rise above the psychologically sensitive $400 line encouraged investors to build additional buy positions.
Silver prices on the Tokyo Commodity Exchange (TOCOM) also rose in line with their dollar-based price, but platinum stayed under pressure as a buoyant yen depressed investor interest, deteriorating after failing to hold above key support.
Gold maintained its safe-haven status with geopolitical concerns increasing after bombings in Iraq and Turkey on Thursday.
"Both gold and silver are following trends in overseas markets after spot gold rose above $400, with the Iraqi situation definitely working as a buying factor," said Chen Chair-Shi, vice president of Nihon Unicom's research department.
Traders were more eager to build long positions in gold and silver amid wariness over security worries, especially between the handover of power to an Iraqi interim government next week and US Independence Day on July 4.
Benchmark April TOCOM gold rose as high as 1,393 yen it's highest since June 8. It closed 12 yen per gram higher at 1,387 yen per gram. The prompt June contracted expired at 1,387 yen, up six yen from the previous day with 1,113 lots of deliveries.
Spot gold eased, but stayed solid above the $400 level. Spot gold was quoted at $401.20/2.00 per ounce from Thursday's late US level $402.25/3.00.
TOCOM silver climbed by its daily seven-yen limit except for the prompt June contract.
The April silver contract closed at 210.4 yen per 10 grams compared with Thursday's close of 203.4 yen.
Traders were also reluctant to go short on gold ahead of a series of events scheduled next week, including the Federal Reserve's monetary policy-setting meeting, US payroll data and the Bank of Japan's "tankan" corporate sentiment survey.
"Further weakening of the dollar should make gold more buoyant and a series of events scheduled next week could be very important," said Konami Goon, research section manager at Okato Shoji Co Ltd.
"But TOCOM platinum is bearish given domestic investors' appetite to sell reflecting the yen's strength." Platinum has been put under downward pressure, as the yen's strength has been overwhelming bullishness in silver and gold.
Traders said profit-taking pressure was strong due to bearish technical trends. Sentiment has deteriorated since the key April contract failed to break key resistance above 2,750 yen in the week and after a decisive fall below the closely watched 2,700 yen line on Thursday, traders said.
Japanese retail players could be shifting out of platinum into gold, while a lack of participation from non-Japanese fund operators also kept the white metal bearish, they said.
Benchmark April TOCOM platinum finished down 15 yen per gram at 2,682 yen.
Other contracts closed down four to 20 yen. Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.
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