Gold inched higher on Tuesday as firm energy prices encouraged buying, but the market moved in a tight band ahead of the release of US economic data that may offer new direction to precious metals. Brighter technical have also attracted fresh buying from investors, with cash gold receiving support as Tokyo Commodity Exchange gold futures edged higher from session lows.
Spot gold was at $672.10/672.90 an ounce, slightly higher from $671.80/672.40 late in London. Markets in New York were closed on Monday for the Labour Day holiday.
"The market looks strong on charts after breaking through $670. The market will watch whether gold can retain the level and rise towards the next psychological point of around $677," said Shoji Sugata, manager at Mitsubishi Corp Futures and Securities.
The spot price peak at $676.60 in August but shied away from the $677 during the month. "Gold will remain solid as there are strong bargain-hunting needs, but with concerns over the supreme problem still there, it would be difficult to buy gold actively," Sugata said.
TOCOM gold futures rebounded from lows, but activity was thin ahead of the release of US data that will give clues on the extent to which credit market turmoil has affected growth. The benchmark August 2008 TOCOM gold futures closed the session down 2 yen at 2,532 yen a gram after falling to a session low of 2,523 yen.
US data due this week includes the Institute for Supply Management's manufacturing activity in August on Tuesday, the Federal Reserve's beige book summary of the economy's performance on Wednesday and the monthly non-farm payroll report on Friday. US crude futures hovered above $74 a barrel as market players kept a wary watch on the potentially destructive Hurricane Felix.
Platinum extended gains to $1,271/1,276 an ounce from $1,264.50/1,271.50 late in London. August TOCOM platinum rose 15 yen or 0.3 percent to 4,697 yen, after a two-week high of 4,701 yen on Monday, a gain of almost 5 percent since reaching a five-month low of 4,483 yen on August 22.
"Platinum is up mainly on technical short covering, but selling interest should grow if it advances to the $1,280-$1,300 territory," Sugata said. Palladium inched up to $329/334 an ounce from $328/332 an ounce. Silver edged higher to $12.09/12.11 an ounce from $12.08/12.13 an ounce.
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