Tokyo gold futures rose on Wednesday as firmness in the spot bullion market drew steady buying of yen-based gold from fund operators, traders said. The benchmark October gold contract on the Tokyo Commodity Exchange (TOCOM) closed up five yen per gram at 1,492 yen from Monday's settlement. It had moved in a range of 1,489 to 1,493 yen.
Other contracts closed up four to nine yen. Gold also received support as the dollar slumped against major currencies. "Gold gained safe-haven buying as the dollar stayed bearish," said Koji Suzuki, manager at Star Futures Securities.
"Gold would be supported and provide support to other precious metals as long as the dollar is weak." Tokyo markets were closed for a public holiday on Tuesday. Spot gold was supported, although traders were reluctant to buy actively from present levels having seen stiff resistance just below $450 per ounce.
Spot gold stood at $447.40/90 per ounce compared with $447.55/8.30 in late New York on Tuesday. Bullion peaked at a fresh 16-1/4-year high of $449.50 on Tuesday. The dollar was quoted at $1.3095/98 against the euro not too far from the record low of $1.3108 set on Tuesday.
The US currency stood at 103.56/60 yen, little changed from late US level on Tuesday but off the four-year low of 102.70 hit on Friday. Traders said purchasing by suppliers has supported gold, who were actively buying back physical supplies to unwind their hedge positions in the futures market.
In addition, gold has benefited from the launch of a gold-backed exchange-traded-fund (ETF) in the United States last week, traders said. A recently launched gold-backed ETF attracted $419 million in its first three days of trading, bringing its total assets to $1.3 billion, a research company said on Tuesday.
The ETF, called streetcars Gold Shares, attracted $589 million last on Thursday, the first day it was offered to the public, and an additional $241 million on Friday, said Santa Rosa, California-based TrimTabs Investment Research.
Platinum posted solid gains on active bargain hunting from end-users. The market appeared to have overcome a depressing Johnson Matthey forecast last week, which projected that supplies of the metal would exceed demand in 2005 for the first time in several years, traders said.
"The market was relieved after seeing plenty of bargain-hunting by end-users," Suzuki said.
"Although sentiment for platinum is not overly strong, it should follow the bullishness of gold," he said.
The key October platinum contract closed up 20 yen per gram at 2,770 yen. It had moved in a range of 2,757 to 2,789. Other contracts closed 16 to 32 yen higher. Traders said bargain hunting emerged when the key contract fell to a near four-month low of 2,728 yen on Monday.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.
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