Tokyo gold futures plunged more than two percent on Monday from a 14-year high reached last week, pressured by the dollar's gains and by falls in oil prices after US refineries escaped damage from Hurricane Rita.
Heavy profit taking hammered down the benchmark August gold contract on the Tokyo Commodity Exchange to as low as 1,669 yen per gram at one point in the morning.
It was down 2.28 percent from Thursday's settlement. Other TOCOM precious metals, such as platinum futures, dropped sharply, tracing falls in gold.
Tokyo markets were closed for a public holiday on Friday. "Active liquidation and profit-taking emerged after sharp losses in overseas markets," said Tatsuo Kageyama, analyst at Kanetsu Asset Management.
"The market is entering a corrective phase and a correction towards 1,650 yen would be possible in the near term."
The August TOCOM gold contract was trading at 1,672 yen, down 36 yen or 2.11 percent from Thursday's close of 1,708 yen. On Thursday, it had climbed as high as 1,716 yen, which was the highest since August 1991. Spot bullion was quoted at $461.75/$462.50 an ounce against $462.90/$463.60 in New York on Friday.
It had climbed as high as $475, the highest since January 25, 1988. The dollar hit a two-month high against the euro after Hurricane Rita spared Texas oil refineries, pushing oil prices lower and alleviating worries that lofty energy costs could eat into US consumer spending.
TOCOM platinum fell in line with falls in gold, and was trading at 3,234 yen per gram, down 66 yen or 2 percent.
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