Taiwan's first gold futures contract closed firmer on the first day of trade on Monday, with investors watching to see if volumes would be high enough to attract continued interest.
The most active June contract closed at US $564.1 per ounce, off an intraday peak of $572.2, but up from an open of $550.0 an ounce on volume of 278 lots.
"The Taiwan market is small for Asia and prices are very high at the moment, so I'm not surprised to see a slow start," one trader in Hong Kong said by telephone.
The June contract was trading at a small premium to spot gold, which eased to $559.80/560.60 an ounce, while benchmark gold futures on the Tokyo Commodity Exchange, currently February 2007, rose 20 yen per gram to 2,128 ($18.27).
Traders have said that foreign interest will only be attracted if volume grows.
Another trader said that while the US dollar denomination was an advantage over gold futures on Japan's TOCOM, political risks from tensions with China could effect investor sentiment.
"It is possible that as it is in Taiwan some people may avoid it because of the potential disruption to the market should conflict with China become an issue again," another trader said.
Taiwan Futures Exchange (TAIFEX) officials are hoping to tap into the global bull run on gold, which since late last year has seen prices soar to 25-year highs. The gold contract, which is for cash settlement, is Taiwan's first commodity future.
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