Tokyo platinum futures extended losses on Wednesday to their lowest level in a week, with sentiment hurt by a forecast that platinum supplies will exceed demand in 2005 for the first time in several years. The benchmark October 2005 contract on the Tokyo Commodity Exchange (TOCOM) fell to 2,798 yen per gram, its lowest since November 10. By the close it was down 38 at 2,822.
Platinum refiner Johnson Matthey said in a report released on Tuesday that the world platinum market, short of supply in 2004 by 40,000 ounces, would turn into surplus next year thanks to expanded mine production.
The British refiner also said in the report that platinum was expected to trade between $760 and $880 an ounce over the next six months. At 0630 GMT, spot platinum was at $854/859, near the upper end of the expected trading range, compared with $864/869 in late New York.
"From a fundamental viewpoint platinum still looks to be overvalued," a Tokyo broker said.
TOCOM benchmark platinum marked a five-week high on Monday of 2,919 yen, a gain of 173 yen or 6.3 percent from its low for this month of 2,746 yen.
By the end of Wednesday the contract had retreated 97 yen or 3.3 percent from that peak.
Further losses in platinum prices could induce physical buying, as jewellery makers are gearing up for the high sales season at the year-end, the broker said.
Gold futures settled higher on Wednesday tracking the New York market, where prices hit a 16-year high aided by a weak dollar that made the metal cheaper for overseas investors.
TOCOM's benchmark October gold contract settled up 13 yen per gram at 1,496. Other months were 13 to 16 yen higher.
Spot gold was quoted at $440.50/441.25 an ounce at 0630 GMT, up from Tuesday's New York close of $439.75/440.50.
December delivery gold on the New York Mercantile Exchange's COMEX division ended at $440.50 an ounce on Tuesday, its highest close since July 1988.
The market has set its sights on $450 for gold, expecting that the dollar will keep sliding on perceptions that the second Bush administration will tolerate a weakening currency to make US exports more competitive, traders said. The dollar idled near seven-month lows against the yen on Wednesday as traders considered what officials from the Group of 20 countries might say about recent weakness in the US currency at an upcoming meeting.
At 0630 GMT, the dollar was at 105.34/37 yen, versus 105.36 in late Tuesday US trade and in sight of a seven-month low of 105.16 hit on Monday.
The euro was at $1.2978/83, off the record high of $1.3006 hit last week. Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.