Tokyo gold futures dipped on Monday, tracking bullion's decline, but a weaker yen provided some support and analysts said the precious metal's fundamental firm trend was intact.
The benchmark August gold contract on the Tokyo Commodity Exchange finished down 10 yen per gram at 1,720 yen, after moving between 1,715 yen and 1,722 yen.
Other months fell by six to nine yen. The decline came after TOCOM gold rose to as high as 1,730 yen on Friday, its highest since July 1991, though one Tokyo analyst said gold was likely to continue to attract buyers as a hedge to inflation and a safe haven.
"Few people hold the view that the market's upturned is over," the analyst said. Crude oil prices have persistently remained at high levels, also enhancing gold's allure as an inflationary hedge.
In the Asia spot market, gold weakened as a firmer dollar spurred selling, but trade was thin due to holidays in some parts of Asia, including China.
Spot gold was fetching $467.60/$468.30 an ounce at TOCOM's closing bell, compared with $468.80/$469.50 last quoted in New York. In New York on Friday, gold futures succumbed to end of quarter position squaring and a dip in oil prices, among other factors.
The benchmark December gold contract at the Comex division of the New York Mercantile Exchange settled $3.50 lowers at $472.30 an ounce. Total gold turnover on TOCOM was estimated at 82,530 lots, down from Friday's heavy 130,904 lots.
In the currency market, the dollar rallied to a 16-month high against the yen, boosted by expectations for more Federal Reserve interest rate rises and a disappointing tankan survey of corporate sentiment in Japan.
The dollar climbed to as high as around 114.20 yen, its highest level since May 2004. It was fetching 113.90/113.94 yen, against 113.49/113.51 yen in late New York trade.
Platinum was the only precious metal to rise on TOCOM, a fact attributed largely to technical reasons.
The benchmark August platinum futures contract closed up 8 yen at a fresh 19-year high of 3,343 yen per gram, after moving from 3,312 yen to 3,348 yen.
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