Tokyo gold futures rallied more than 1 percent to a fresh 20-year high on Thursday, buoyed by the yen's falls on the dollar and jitters over Iran's nuclear programme following comments by the Iranian president.
Gold's strength boosted Tokyo Commodity Exchange platinum futures to fresh record highs with speculators actively buying the white metal based on bullish technical. Japanese short-term fund operators and retail investors bought TOCOM gold as they were encouraged by dollar-based spot gold's gain to a new 25-year high of $709 an ounce.
"Gold is bullish fundamentally and technically. It will rise more. We don't know how far it will go," said Shoji Sugata, assistant manager at Mitsubishi Corp Futures and Securities Ltd Key most-distant TOCOM gold futures closed the session at 2,572 yen a gram, up 34 yen or 1.3 percent from Wednesday's close.
It had moved in a range of 2,550 to 2,577 yen, the highest since September 1985. Other contracts rose by 25 to 31 yen. A slightly weaker yen against the dollar prompted solid buying around the days low, with gold receiving additional support by comments from Iranian President Mahmoud Ahmadinejad.
In Jakarta on Thursday, he said Iran's nuclear programme is peaceful and has no military purpose, adding he was ready to engage in dialogue with anybody.
The president said, however, it was "ridiculous" for countries with nuclear arsenals of their own to be pressing Iran to curb its effort to develop nuclear energy. He said Iran had "capabilities" to defend its interests.
"I don't think his comments were surprising, but one thing I can say is that as long as Iran's factor is there, gold will be supported," Sugata said. The yen fell as low as around 111.48 against the dollar on Thursday, after rising to a fresh eight-month high of 110.10 yen the previous day.
A lower yen effectively raises the value of yen-based gold. Spot gold hit another 25-year high of $709 an ounce in Asian hours on Thursday before profit taking kicked in as the dollar rebounded against other currencies.
Gold was trading at $706.40/707.15 an ounce, up from $701/702 late in New York. Spot gold is expected to find support at its seven-day moving average of $688. Key TOCOM platinum rose more than 2 percent to a new record high of 4,473 yen per gram.
Active speculative buying of platinum has been emerging since the start of the week after it surged more than 6 percent since the start of the month.
Key April platinum contract particularly increased momentum on Wednesday after breaking above the previous record of 4,301 yen reached on April 20.
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