Tokyo precious metals surge

Tokyo gold futures rose more than 2 percent to a two-month high and platinum futures hit a record high on Monday as strength in cash gold, which held near a two-week high due to dollar weakness, encouraged active buying.
Precious metals drew broad demand from investment funds as the dollar weakened against the Euro after on Friday's soft US payrolls report reinforced expectations that the US Federal Reserve could lower interest rates later this year.
"A weaker dollar is a distinct factor to buy gold now," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo. "The market is also confident to buy after seeing the cash price being supported around $670."
Spot gold was trading at $689.00/689.50 an ounce, up from $687.60/688.10 late in New York on Friday, when it hit a peak of $690.65, the highest since April 24.
Spot gold fell as low as $667.30 on May 2, but it has attracted strong bargain hunting near the low point. Tokyo precious metal prices rallied across the board as investors actively bought to catch up with gains made in European and US market during a four-day holiday in Japan.
The key April Tokyo Commodity Exchange gold contract rose by the daily 60-yen limit to 2,682 yen a gram the highest for a benchmark contract since February 27. It closed at the limit high level, up 2.3 percent from Wednesday's close of 2,622 yen. Japanese markets were closed for the Golden Week holidays on Thursday and Friday.
Benchmark April TOCOM platinum futures surged by the daily 100-yen limit to a record high of 4,987 yen per gram on Monday, tracking gains in gold and supported by speculative buying linked to launches of exchange-traded funds (ETFs). Traders said the weakness of the dollar against the Euro would keep precious metals bullish. The US currency stayed on the defensive against other major currencies on Monday after falling on the US payroll data.
The US economy added modest 88,000 jobs in April, the slimmest gain in more than two years, while the jobless rate rose to 4.5 percent from 4.4 percent in March. The gold market will closely watch the dollar's move after the Fed.'s monetary policy meeting on Wednesday. The Fed is expected to keep rates unchanged at 5.25 percent so the focus will be on its statement after the meeting.
Platinum rose to the highest level since November 21, when it reached a record high of $1,395. It rose to $1,336/1,341 an ounce from $1,321/1,326 in New York on Friday. Traders said platinum would be supported after launches of platinum ETFs and ahead of the release of Johnson Matthew's platinum review on May 14. "The launches of platinum ETFs are helping the market.
The market will be careful about selling platinum actively now as it's possible to see more launches in the future," Kageyama said. Palladium edged up to $375/380 an ounce from $373/378 in New York. Silver rose to $13.50/13.53 an ounce from $13.41/13.46 late in New York.