Tokyo gold futures rose for a fourth consecutive day on Thursday as continued concerns over inflation induced steady buying from investors, with the strength in gold leading to a rally in palladium and platinum.
The newly listed benchmark gold futures contract rose to a one-and-a-half-week high of 1,767 yen per gram. The previous benchmark August gold closed up eight yen, or 0.46 percent, at 1,765 yen.
Benchmark Tokyo Commodity Exchange palladium futures hit a 16-month high on buying by speculators on views that the value of the white metal was cheaper relative to other metals.
Newly listed benchmark October TOCOM palladium closed at 844 yen per gram after at 843 yen. The outgoing benchmark August contract closed up 32 or 3.95 percent at 842 yen.
"Firmness in gold prices is pushing up palladium and others, but recent rallies have been mostly done by speculators as there are no new fundamental reasons to buy," said Hisaaki Tasaki, market analyst at Ace Koeki Co Ltd.
"Palladium is now catching up with platinum and other precious metals as its gains were very limited when the others were rising sharply," Tasaki said.
Low liquidity in palladium, which is used mainly in automotive catalytic converters to clean exhaust fumes and in jewellery, could be a major factor, which has exaggerated the upturned this week.
TOCOM palladium has surged more than 10 percent from a week. Newly listed benchmark October platinum futures rallied to a fresh 19-year peak at 3,481 yen per gram before closing at 3,475 yen.
The previous benchmark August contract closed at 3,480 yen, up 29 yen or 0.84 percent from Wednesday's settlement. Speculators are keen to push up the benchmark contract to a record high of 3,520 yen, but the market is nervous about taking big positions ahead of an interim report by London-based precious metals refiner Johnson Matthew on November 15.
Gold continued to be supported by inflation concerns, which were increased by solid oil prices, traders said.
"Excess funds are flowing into the gold market as inflation fears are still there," said Koji Suzuki, market analyst manager at Star Asset Securities.
"We've seen some correction last week, but bargain-hunting emerged as underlying sentiment remained strong." TOCOM gold received support from spot gold, which rose in Asia as the dollar backed off from its highs.
Spot bullion was quoted at $472.75/473.50 an ounce against $470.30/471.00 in New York.