Tokyo platinum futures rallied to the highest level in nearly eight months on Wednesday as positive technical signs triggered fund buying, while gold futures settled firmer buoyed by a softer yen against the dollar. The April platinum contract on the Tokyo Commodity Exchange finished up 25 yen per gram at 2,950 after trading between 2,918 and 2,953 - the priciest for TOCOM's benchmark platinum since October 7, when prices rose as high as 2,956.
Other months were two to 28 yen higher at the close.
"Fund buying emerged as market sentiment turned positive after the benchmark contract broke through the ceiling of the recent range at 2,909 yen yesterday," a Tokyo broker said.
"It was a technical rally. I don't see fresh fundamental factors to stimulate buying," he added.
TOCOM platinum has more room to advance, as stop-loss buying is expected to come from local investors, who are net sellers of the forward-month contracts, he added.
Many short position holders have sustained losses, as TOCOM platinum contracts for delivery from October 2005 to April 2006 marked lifetime highs on Wednesday.
Volume was heavy at 45,787 lots on Wednesday, up sharply from Tuesday's 24,598 lots.
Spot platinum was quoted at $866/871 an ounce at 0630 GMT, up from $859/864 in late New York.
A weak yen against the dollar also buoyed TOCOM prices.
The dollar hovered around 108.30 yen in late Tokyo trade on Wednesday after the US currency's climb against the euro drove the yen to a six-week low of 108.58 yen on Tuesday.
The euro slid to as low as $1.2298 on Wednesday, nearing a fresh seven-month low of $1.2296 hit in New York in a delayed reaction to the French "No" vote after traders returned from a holiday on Monday.
France's rejection of the EU constitution at the weekend pushed the euro down nearly a cent in London and New York on Tuesday, highlighting market concerns about political and economic stability in the euro zone.
More selling of the European currency was expected after a Dutch vote later in the day that will also likely reject the EU constitution, currency dealers said.
The dollar's firmness against the euro continued to weigh on sentiment for gold, which is seen as an alternative investment to dollar-based financial assets.
Spot gold was quoted at $417.30/418.00 an ounce at 0630 GMT, against $416.50/417.20 in late New York. Bullion dived to a 15-week low of $413 on Tuesday.
TOCOM's benchmark April gold ended up three yen per gram at 1,460, with other months gaining two to three yen.
Traders were eyeing reports this week on US manufacturing and the labour market to judge the economy's strength and the likelihood of more credit tightening by the Federal Reserve.
Higher US interest rates have made gold, which bears no interest, less attractive to investors.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.