Tocom gold futures up

Tokyo precious metals futures rose on Monday as the yen's decline to a four-year low fuelled across-the-board buying, prompting the key gold contract to revisit the 8-month high touched last week.
Silver also rose, with the lead contract on the Tokyo Commodity Exchange climbing to its highest level since September 7, 1985, the exchange said. The benchmark most-distant December gold contract on the Tokyo Commodity Exchange closed at 2,548 yen per gram, up 4 yen or 0.16 percent. It had moved between 2,548 yen and 2,555 yen, matching the eight-month high reached on January 24.
The level is the highest for a benchmark contract since May 15. "It looks like the market is having a difficult time topping 2,555 yen," a Tokyo broker said. "This looks like the psychological line of resistance for the time being, he said. Tocom gold has climbed more than 8 percent since this year's low of 2,355 yen hit on January 9.
Investors say the market is overbought given its recent steep gains, leading to the view that a correction is due. At 0724 GMT, spot gold was trading at $645.20/$646.20 an ounce, compared with $645.00/$646.00 last quoted in New York, as it struggled to recapture the $650 level hit last week.
The yen fell against the dollar to its lowest level since December 2002 on Monday, after solid economic data late last week reinforced views that the Federal Reserve will keep interest rates steady in the months ahead. The dollar's rise above 121.88 yen has opened the way for the US currency to eye 125.73 yen, hit in December 2002.
A weaker yen against the dollar makes yen-denominated commodities more expensive in the dollar export market, and is often a factor to boost Tocom prices. Peter Tse, a dealer at Scotia Mocatta in Hong Kong said bullion could continue to drift around $640-$650 ahead of a meeting by the Federal Reserve.
A series of US economic data is due to be released this week, in addition to a Fed rate-setting meeting ending on Wednesday when the central bank is widely expected to keep rates unchanged. December Tocom silver closed at 523.0 yen per 10 grams, up 3.6 yen from Friday when it closed up 10.3 yen.
On Monday, it had climbed as high as 524.8 yen. Tocom said this was the highest level for a lead contract since it hit 525 yen on September 7, 1985. Elsewhere, key Tocom platinum inched down on profit-taking, but other contracts were mildly firmer.
Benchmark December platinum futures contract closed at 4,511 yen, down 3 yen from Friday's close. Spot platinum was at $1,169/$1,174, compared to New York levels' of $1,171/$1,177 an ounce.