Gold erased some of the gains made in New York and lost around $2 in Asian trading on Thursday as investors took profit after the metal recaptured $400 an ounce.
Gold hit a high of $401.50 an ounce before easing to $399.50/400.25. That compared with $402.00/402.75 in New York on Wednesday, when the metal rallied on expectations the Federal Reserve would show restraint in raising interest rates.
In Tokyo gold futures, benchmark June 2005 rose 12 yen per gram to 1,398 yen, tracking New York's gains.
"I think there's some selling from China," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong, a key bullion trading city in East Asia.
"I think the range should stay at $398 to $403," said Chu, adding the premiums for gold bars in Hong Kong were flat at around 10 US cents an ounce to London physical prices.
Other Hong Kong dealers also reported selling by investors in China, which is the world's third-largest gold consumer.
"There's some profit taking after the metal rebounded to above $400 last night. I see the first support at $398 and resistance at $402 or $403," said one Hong Kong dealer.
"Trading will be between those levels in Asia," he said.
Spot gold jumped nearly $10 in New York on Wednesday as the euro hit a three-month high of $1.2390 against the dollar, which makes dollar-priced gold cheaper for the Europeans.
The dollar's fall was an extension of the sell-off sparked by Friday's weaker-than-expected US payrolls data and Tuesday's report showing a slower pace of expansion in the US service sector.
The single currency was at $1.2356 in Asian trading, up from $1.2346 in late US trade.
Dealers said movements of the dollar against other currencies were likely to be gold's main driver in the next few weeks as trading slowed ahead of the July summer holidays.
But some said gold was likely return to the psychologically important $400 when profit-taking subsided, and due to a weak dollar.
"Gold did very well to break through overhead resistance at $400 and the price looks set to have a 4 in front of it for the run into the weekend," said N M Rothschild in a daily report.
Platinum touched an 11-day high of $802 an ounce before falling back to $799/804, still higher than New York's last quoted level of $793/798.
The Tokyo palladium futures were also firm, with benchmark June platinum rising 34 yen per gram to 2,660 yen.
Sister metal palladium was at $223/228 an ounce, up from $220.50/226.50.
Silver was unchanged at $6.10/6.13 an ounce.
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