Tokyo gold futures rose to a new 15-year high on Monday as investors took the market's dip as a buying opportunity, amid expectations that gold will benefit from inflation and geopolitical risks.
Platinum futures closed mixed, with the benchmark contract slipping further from the record high set last week as profit-taking gathered pace on a view the market had been overbought, brokers said.
The key October gold contract on the Tokyo Commodity Exchange finished up 13 yen per gram at the day's high of 1,889, the priciest for TOCOM's benchmark gold since January 1991 when the Gulf War spurred buying of the safe-haven metal.
The contract dipped to as low as 1,871 yen in trade, tracking small losses in Comex gold on Friday. But prices soon rebounded on bargain hunting from investors.
"Sentiment towards gold remains bullish on the back of good fundamentals and concerns about inflation," a Tokyo broker said, adding that October gold was likely to test the 1991 high of 1,915 yen in the near future.
TOCOM gold also drew support from the currency market as the dollar firmed towards a two-year high against the yen on Monday on expectations that a gap between Japanese interest rates and US would widen further, he said.
The dollar was at 119.35/37 yen, up from 119.10 yen in late New York trade on Friday and not far off last week's peak of 119.58 yen, the highest since August 2003.
Spot gold was quoted at $487.60/488.10 an ounce, up from Friday's New York close of $485.40/486.20. Spot gold rose to $488.70 last on Friday, it's highest since January 1988, despite dollar strength that makes bullion more expensive for holders of other currencies.
Analysts said speculators had been showing keen interest in commodities amid worries about the impact of high crude oil prices, inflation, the US economy and geopolitics.
Gold has gained 14 percent since the beginning of 2005 and has nearly doubled since touching lows of $254 in 2001. Market sentiment was also lifted on Thursday's report by the industry-backed World Gold Council, which said global gold demand in the third quarter of 2005 rose by 7 percent to 838 tonnes from a year.
In the platinum market, TOCOM's benchmark October contract closed down seven yen per gram at 3,734, after trading between 3,702 and 3,748. Investors were eager to take profits after last week's Bull Run that boosted prices of TOCOM's benchmark platinum to the record high of 3,783 yen, brokers said.
Spot platinum was quoted at $976/980 an ounce, down from Friday's New York close of $979/982 and a near 26-year high set last on Thursday of $992.
London-based refiner Johnson Matthey said last week that platinum was likely to range between $890 and $1,030 an ounce over the next six months, adding steam to the rally.
Analysts said active buying by funds could soon push up platinum to $1,000, a price last seen in March 1980.
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