Tokyo gold futures were mostly unchanged on Friday after gains were erased due to a drop in Japanese shares which also brought pressure to bear on the dollar, causing it to drop against the euro and yen among others.
Traders remain edgy about declines in stock markets, fearing this could trigger further sales of portfolio assets, including gold, by risk-averse investors wanting to cover their losses. The Nikkei average fell more than one percent on Friday before ending the session down 155.46 points at 16,704.93. The benchmark most-distant February gold contract on the Tokyo Commodity Exchange finished the flat at 2,452 yen per gram after climbing as high as 2,467 yen.
It slipped to 2,451 yen. "Gold remains sensitive to what happens in the stock market," said Koji Suzuki, a market analyst at Kazakh Commodity Co Ltd Market fundamentals, however, are unchanged and the long-term outlook is that demand for gold remains steady.
"In addition, there isn't much in the way of fresh supportive news to encourage buying of gold at the moment," Suzuki said. Investors were also reluctant to build new positions ahead of the weekend. In the currency market, the euro rose to a three-month high against the dollar on Friday as Tokyo share prices fell and ahead of US inflation data later in the session.
The euro rose above $1.33 for the first time since December. The dollar was fetching 116.84/116.87 yen, against 117.48/117.51 yen in late New York trade. Spot gold was trading at $646.20/$647.20 an ounce, compared with $646.40/$647.40 last quoted in New York.
US gold futures ended on Thursday with healthy gains after several sessions of lower closes brought buyers back in to buy the lows, inspired by a rebound in US stock prices. Benchmark gold futures for April delivery on the Comex division of the New York Mercantile Exchange finished $4.60 higher at $647.10 an ounce. Elsewhere, TOCOM precious metals were mixed. Benchmark February platinum futures contract closed down 27 yen at 4,418 yen per gram.
Spot platinum fell to $1,207/$1,212 from New York levels of $1,213/$1,217 an ounce. February TOCOM silver was at 487.8 yen per 10 grams, up 4.5 yen. Spot silver was mostly steady at $12.96/$13.01 an ounce versus $12.97/$13.02 in New York. February TOCOM palladium was at 1,321 yen per gram, down 4 yen. Spot palladium was at $347/$352 an ounce, compared with $349/$354 in New York.
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