Tokyo gold futures fell modestly on Friday, reflecting a decline in oil prices and as dollar-denominated spot bullion backed off, but trading was calm following bomb attacks that rocked London a day. Gold prices were expected to gain support after the London blasts, considering that the metal is a safe-haven instrument, but traders' focus was shifting to US payroll data later in the day to gauge the outlook for the dollar and the yellow metal.
"The commodity markets were generally calm as the impact of the bomb attacks in London was small in the financial markets," said Hiroyuki Kikukawa, associate director at Nihon Unicom Corp. "The trend for gold will depend on how the dollar moves after tonight's jobs data gold could stay capped if the current upturned of the dollar stays after the data."
The payrolls report, due, is expected to show 188,500 new jobs in June, according to the median forecast of a Reuters poll. That would be a big improvement on 78,000 in May. The benchmark June gold contract on the Tokyo Commodity Exchange closed down six yen, or 0.39 percent, at 1,532 yen per gram.
It had moved in a range of 1,531 to 1,537. Other contracts closed down two to five yen, with TOCOM gold turnover totalling 42,326 contracts. Spot gold was trading at $423.40/$424.10 an ounce, down from the late New York level of 423.75/424.50.
On Thursday, gold hit a one-week high of $428.50 after deadly explosions on London underground trains and on a bus killed at least 37 people and wounded around 700. "The market is mostly quiet, but in this mood, people will be reluctant to sell gold aggressively," said Kaman Gokon, research section manager at Okato Shoji Co Ltd.
Gokon said gold prices could be supported on safe-haven buying, but the market also would be careful about buying too strongly after seeing steep falls in the week. The key TOCOM gold contract fell to a three-week low of 1,521 yen on Wednesday after surging to a 13-year high of 1,556 yen just a week ago.
The volatility in oil prices has forced investors to unwind some positions in yen-based commodities and gold was not an exception, traders said. Key US crude oil for August delivery was trading at $61.45 a barrel in late Asia.
On Thursday, the contract settled 55 cents lower at $60.73 on the New York Mercantile Exchange. It fell as low as $57.20 in overnight ACCESS trading after the bomb attacks and after hitting a record high of $62.10 on that day.
The key TOCOM platinum futures contract closed down three yen, or 0.1 percent, at 3,045 yen per gam. It had moved in a range of 3,036 to 3,052 yen. Other platinum contracts fell four to 11 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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