Tokyo platinum futures steadied by late Tuesday after coming under pressure from falls in yen-denominated oil prices, but the market was mostly range-bound amid a lack of clear factors on which to trade.
April platinum futures on the Tokyo Commodity Exchange (TOCOM) briefly fell to a session low of 2,690 yen, but they met solid bids around that level given the recent downtrend of the dollar and views of tight supply conditions.
Falls in TOCOM oil prices had an indirect impact in dragging down precious metals prices as investors had difficulty finding a trend in the cash precious metals market reflecting an absence of Hong Kong traders due to a market holiday there.
"TOCOM platinum and other precious metals faced some selling pressure given steep falls in crude oil and oil products prices," said a senior trader at a Japanese trading house.
"Basically, precious metals looked pretty range-bound with the market concentrating mainly on technical adjustments."
Traders said the market was nervous about creating large positions ahead of an interest rate decision by the US Federal Reserve at its June 29-30 policy meeting and the handover of power to the Iraqi interim government later in the month.
Technical activities also dominated the TOCOM market ahead of the expiration of the prompt June contract at the end of the week. The April platinum contract closed down 11 yen per gram at 2,707 yen compared with Monday's close of 2,718 yen.
Other contracts closed down four to 15 yen, with the exception of the October contract, which rose a slim one yen. November TOCOM crude closed down 560 yen at 21,730 yen per kiloliter.
However, precious metals found some support as the dollar struggled at a two-month low on the yen.
The dollar continued to suffer from a bigger-than-expected US current account deficit, unveiled on Friday.
The US currency was also pressure against the yen due to expectations that upcoming economic data in Japan could trigger a new wave of buying in Japanese shares.
Japan's tertiary index data is due on Thursday, industrial production numbers are slated for next on Tuesday and the Bank of Japan's "tanking" survey of corporate sentiment is due on Thursday next week.
The dollar was around 108.70 yen compared with 108.85/93 in late US trade on Monday. "There are no clear factors to drive platinum upwards now. It seems the market is reluctant to bid too strongly," said Akira Doi, director at Daiichi Commodities Co Ltd.
"But at the same time there is no energy in the market now to drive down prices sharply with the dollar weak," Doi said. Gold prices were narrowly mixed with short-covering demand ahead of the expiry lifting the prompt June contract, while the key distant April contract fell slightly.
Lingering geopolitical concerns kept gold prices well-supported and further gains in dollar-denominated spot prices could encourage buying in TOCOM gold. The key TOCOM gold contract closed down one yen at 1,375 yen per gram.
Other contracts closed down one yen to up five-yen. Spot bullion was little changed at $393.30/4.05 an ounce from the New York level of $393.40/4.15.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.