Tokyo platinum futures fell on Thursday, tracing a drop in gold spurred by the dollar's recovery, although bullish fundamentals were seen supporting the white metal.
Light profit-taking in trade drove down the key June platinum contract on the Tokyo Commodity Exchange (TOCOM) to a session low of 2,876 yen per gram after hitting a two-month high of 2,920 yen the previous day.
Dollar-denominated spot platinum came off lows, but struggled to advance as plenty of offers were rumoured lined up above $850 per ounce. "The spot price around $850 looks overbought.
Active speculative buying in TOCOM platinum has set the current trend," a senior trader at a Japanese bullion house said. "Physical buyers are completely on the sidelines because the spot price is at such a high level," the trader said.
The June TOCOM platinum contract closed down 11 yen per gram at 2,899 yen. It had moved in a range of 2,876 to 2,900 yen. Other contracts closed up 6 yen to down 18 yen. Spot platinum was quoted at $841/$846 compared with Wednesday's late US level of $834/$839.
The spot price had hit a three-and-a-half month high of $852 the previous day, but has been pressured since then in line with the gold price. "Precious metals are generally under pressure today, pulled down by gold's downtrend originating in New York trade," said Hiroyuki Kikukawa, associate director at Nihon Unicom Corp.
Kikukawa said gold had been undermined by the stronger dollar, which rebounded after falling sharply in the week in the wake of much-weaker-than-expected US payroll figures.
Although the dollar eased to 110.63/68 yen in late Asian trade from a session high of around 110.85 yen, sentiment for the greenback was stronger than in the week when it struggled near 110 yen, currency traders said.
The dollar was further supported after the Federal Reserve raised interest rates by 25 basis points on Tuesday. But the market remained sceptical whether the US economic recovery was indeed taking hold after a recent run of soft US data.
Players in the currency and precious metals markets were looking to US retail sales data due for more clues to the economy's trend. A Reuters poll produced a median forecast for a rise in retail sales of 1.1 percent in July from the previous month, lifted mostly by higher auto sales.
Sales fell 1.1 percent in June. The June TOCOM gold contract closed at this week's low of 1,408 yen per gram. It had moved in a range of 1,408 to 1,411 yen. Other contracts closed down 8 to 10 yen.
Spot gold was quoted at $395.80/6.30 an ounce against $395.00/5.50 in New York. Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.