Tokyo gold futures extended losses to a one-month low on Wednesday, as bullion sank about one percent on the back of a stronger dollar after the US Federal Reserve warned it may act more aggressively to tame inflation. But losses on the Tokyo Commodity Exchange were moderate, as a weak yen against the dollar supported yen-based prices. TOCOM's benchmark February gold contract finished down five yen per gram at 1,451 yen after trading between 1,453 and 1,450 - the lowest since February 22.
It was also down 3.0 percent from the three-month high of 1,495 yen set on March 14.
Spot gold was quoted at $426.90/427.60 an ounce at 0630 GMT, down from Tuesday's New York close at $431.00/75.
"Gold came under pressure as the strength of the dollar prompted investors to lock in profits ahead of the Easter holiday and ahead of the end of the first quarter," said Akira Doi, director at Daiichi Commodities Co Ltd.
The dollar held near a one-month high against the euro on Wednesday, boosted after the Federal Reserve signalled it may speed up the pace of interest rate rises to counter any acceleration in inflation.
After Tuesday's policy meeting, the Fed said "pressures on inflation have picked up" and the risks to growth and price stability would only remain balanced with appropriate policy action.
Higher interest rates tend to strengthen the dollar and thus reduce gold's attraction as foreign investors end up putting more money into dollar assets.
"Speculation of more credit-tightening by the Fed lingers but I don't think funds will be pulled out from gold heavily," Doi said, adding that gold prices would head up again when investors return from the this weekend's holiday. The euro was at $1.3076/79, not far from a one-month low near $1.3055 marked on Tuesday.
The dollar was at 105.30/34 yen, in sight of the one-month high around 105.70 struck the previous session.
Platinum futures ended mixed on Wednesday, weighed down by the weaker gold market.
TOCOM's benchmark February contract finished down three yen per gram at 2,839 yen. Other months were flat to nine yen higher. Spot platinum was quoted at $857/862 an ounce at 0630 GMT, down from $862/866 in late New York.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.