Tokyo rubber futures reversed losses and ended higher on Tuesday after gains in other commodities spurred new buying interest from investors. The key, most distant December Tokyo Commodity Exchange rubber had dropped to a four-week low of 282.8 yen ($2.48) a kg before rebounding to end at 294.2 yen, up 8.6 yen from Monday's close.
"TOCOM rubber is cheap compared with physical prices in Thailand. The discount is quite big, so when other commodities go up, I guess rubber reacts strongly," said a dealer in Tokyo. "Technically speaking, you should sell the market," he said.
Tokyo gold futures tracked a recovery in spot bullion prices, but gains were limited due to softer oil prices and uncertainty about the direction of the currency market.
The benchmark June 2007 gold contract on the Tokyo Commodity Exchange settled up 16 yen or 0.7 percent at 2,337 yen per gram after trading between 2,310 and 2,340.
The Thai rubber market was closed for a holiday, but some dealers in Japan quoted tyre-grade Standard Thai Rubber, or STR20 block, for August at $2.51 a kg, free on board, higher than $2.48 a kg on Monday.
Thailand's benchmark RSS3 rubber sheet for August shipment dropped to $2.62 a kg from $2.65, said dealers. Dealers reported overnight deals for Indonesia's SIR20 at 104.75 US cents per pound ($2.31 a kg) free on board at Begawan port in North Sumatra for September shipment. "There's buying interest at 105.50 cents for September today, but sellers are not keen to let go," said a dealer in Padding, the provincial capital of West Sumatra.
Some Jakarta dealers said offers were also heard around 107.50 to 108.00 cents. In Malaysia, SMR20 was steady at between $2.45 and $2.48 a kg FOBS for August shipment. In China, the most active September Shanghai rubber contract rose 515 yuan per tonne to end at 25,585 yuan ($3,202) per tonne, tracking a rebound in the Japanese market.
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