Tokyo gold futures dropped on Friday as the firm yen prompted active selling to adjust positions ahead of the weekend, with slight falls in the dollar-based spot price also hurting, traders said.
The benchmark gold futures on the Tokyo Commodity Exchange (TOCOM) slumped near to this week's low of 1,464 yen per gram as the spot price drifted from a 6-1/2 month high of $426 per ounce hit the previous day.
"As spot gold seems to be losing momentum above $425, the market sold to adjust positions in TOCOM gold by factoring in a stronger yen," said Shoji Sugata, assistant manager at Mitsubishi Corp Futures Ltd.
"The spot price needs to climb convincingly in order to see the yen-based gold rising but otherwise it could be under pressure if the yen stays strong," Sugata said. The August gold contract closed down 7 yen per gram at 1,466 yen. It had moved in a range of 1,464-1,470 yen.
Other contracts closed down 3 to 11 yen. Spot gold lost momentum after it failed to test $430 an ounce, reflecting a slowdown in jewellery purchases, especially in India, the world's largest buyer.
Spot gold was at $423.40/90 an ounce, versus $423.85/4.60 in New York on Thursday. The dollar regained some ground against the yen on Friday, moving away from four-month lows hit the previous day, but sentiment for the currency was bearish after it lost about 3 percent in two weeks, currency dealers said.
The dollar was quoted at 107.61/64 yen from 107.48 in late US trade and a four-month low of 107.35 on Thursday. The euro was at $1.2630/33 against 1.2616. It rose to an eight-month high of $1.2652 on Thursday.
"The dollar should set trends for precious metals, but nervousness will grow ahead of the US presidential election," said a trader at a Japanese trading house. TOCOM platinum futures were off their lows after meeting solid bargain-hunting, traders said, adding that end-users were buying the physical metal on price falls.
TOCOM's benchmark August platinum contract closed up 1 yen per gram at 2,893.
Other contracts were unchanged to down 15 yen. Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.