Tokyo gold futures extended losses to a second day on Friday in a correction after recent sharp gains and in a reflection of falls in New York, but were well-supported by solid bargain-hunting.
Tokyo Commodity Exchange gold futures fell from the start of trade as investors locked in profits and lightened positions ahead of the weekend.
The key August contract fell as low as 1,741 yen a gram, down about 1.7-percent from a 14-year high of 1,771 yen reached on Wednesday. It closed at 1,742 yen, down 13 yen or 0.74 percent from Thursday's settlement of 1,755 yen. Falls in dollar-based gold prices have undermined TOCOM prices, but investors were unwilling to sell gold too heavily as inflation concerns remained, with oil prices still at high levels, traders said.
"Gold is in a corrective phase, but a stronger dollar is not having much impact on prices," said Kaman Gokon, research section manager at Okato Shoji Co Ltd.
"The current correction is a healthy one and underlying sentiment is still bullish with many bargain-hunters eagerly looking for chances to buy on dips."
Gooks said, however, that the market could be a bit nervous about taking new positions in gold and other commodities in the wake of trouble at US commodities and futures brokerage Reface Inc, whose shares have fallen more than 60 percent this week.
Refocus former chief executive was charged this week with securities fraud over hundreds of millions of dollars owed to it by an entity he controlled.
Reface said on Thursday liquidity at one of its units a fixed income, equities and foreign exchange brokerage is no longer sufficient to continue operations.
Spot bullion was unchanged at $470.90/471.70 from the late New York level on Thursday. On Wednesday the spot price rose as high as $480.25, the highest since January 1988.
Metal traders will wait for US consumer price index (CPI) data for September due to determine whether the Federal Reserve will keep raising interest rates.
Economists polled by Reuters have, on average, forecast a 0.9 percent rise in the September CPI compared with a 0.5 percent increase in August.
Excluding the volatile food and energy items, it was seen up 0.2 percent versus a 0.1 percent rise the previous month. TOCOM platinum futures posted their first loss since October 5, tumbling nearly 2 percent on the day on heavy profit-taking, traders said.
Benchmark August platinum closed at a session low of 3,392 yen per gram, down 65 yen or 1.88 percent from the previous close of 3,457 yen, which was the highest since September 1986.
The key contract, however, managed to hold above its 7-day moving average of 3,388 yen. Other contracts closed down 41 to 61.
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