Tokyo gold futures retreated from a two-week high on Wednesday as the yen's bounce against the dollar induced long liquidation, and brokers said they expect the market to consolidate after recent volatile trading.
The benchmark April 2005 gold contract on the Tokyo Commodity Exchange (TOCOM) settled down 10 yen per gram at 1,375, after moving between 1,368 and 1,378. "Activity was relatively quiet today as operators mostly stayed on the sidelines after digesting prospects for a US interest rate rise," a Tokyo broker said.
The market is expected to fluctuate narrowly around current levels until it gets fresh clues for direction from a series of US economic data later in the week, he added.
April gold dived to a three-month low of 1,358 yen on Monday after last week's stronger-than-expected US payrolls data increased expectations for an interest rate rise. On Tuesday it bounced to a two-week high of 1,385 yen on technical buying.
Spot gold was quoted at $378.25/379.00 an ounce, compared with Tuesday's New York closing bid of $376.80 and London's afternoon fix of $375.25.
In the platinum market, the benchmark April 2005 contract finished down six yen per gram at 2,711, after trading between 2,671 and 2,716. Spot platinum was quoted at $788.00/792.00 an ounce, up from New York's last quoted $780.00/785.00.
Brokers said the market appeared to have confirmed a floor as the April contract rebounded from the five-month low of 2,557 yen. But investors were still wary of building long positions in TOCOM platinum, as they remained cautious about Chinese demand after Beijing took measures to cool its overheated economy.
China is the world's largest market for platinum jewellery, with an increasingly wealthy population seeking luxury goods.
Trade was also subdued as TOCOM participants awaited the release of a platinum demand/supply report by British platinum refiner Johnson Matthew, due out next week, brokers said.
The dollar stood at 112.80/88 yen, down from Tuesday's high around 113.85.The greenback hit an eight-month high of 114.15 yen on Monday. The dollar retreated as the effects of last week's strong US jobs data faded and as Japanese stock prices rebounded after a heavy sell-off in the week, currency dealers said. Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.