Tokyo gold futures were trapped in tight ranges on Wednesday as Japanese investors refrained from taking new positions ahead of Japanese fiscal year book closings. Early rounds of buying quickly ran out of steam and the market lost direction after the February gold contact on the Tokyo Commodity Exchange failed to rise beyond the previous day's 1-1/2-week high of 1,477 yen per gram. Japan's fiscal year ends on Thursday.
Investors were also waiting for US jobs data due on Friday to determine the outlook of the dollar and the Federal Reserve's monetary policy, which could affect precious metal prices.
"Japanese players are concentrating on position adjustments, with some traders selling physical gold positions before the book closings, which may have put some pressure on the metal," said a trader at a Japanese trading house.
The February gold contract finished unchanged at 1,473 yen per gram. Other contracts were down one yen to up three yen.
At 0636 GMT, spot bullion firmed to $426.20/$426.70 an ounce from $425.65/$426.40 in New York.
Yen-denominated gold has been buoyant this week, benefiting from a weaker yen, but the market was getting nervous about chasing TOCOM gold further as dollar-based prices were struggling, traders said.
Growing expectations that US jobs data will support the case for more aggressive rises in interest rates encouraged dollar-buying against key currencies, prompting funds to shift out of commodities including gold.
"Further strengthening of the dollar may depress gold, but gold should find plenty of bargain-hunting demand from Chinese and Indian buyers," the Japanese trader said. The dollar was trading at 107.34/37 yen after hitting 107.70, its highest level since late October.
The benchmark TOCOM platinum contract shied away from closely watched resistance of 2,900 yen per gram, but underlying sentiment was strong as investors were keen to take new positions due to the metal's bullish technical trends.
February platinum closed up four yen at 2,888 yen per gram. It had moved in a range of 2,876 to 2,896 yen. "Sentiment for platinum will turn stronger should it break through 2,900 yen as the technical trend is expected to improve further," said Hisaaki Tasaka, market analyst at Ace Koeki.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.