Tokyo gold futures inched down in cautious trade on Tuesday as investors refrained from betting heavily in either direction ahead of a series of US economic data which is expected to provide impetus to currency markets.
Federal Reserve Chairman Ben Bernanke is also due to comment on the economy, and this was an additional factor slowing market activity. "It's not the kind of market in which you would want to move aggressively," a Tokyo trader said. The Fed chief's comments, as well as a series of economic data this week including figures on housing and manufacturing, are expected to provide currency traders with clues about the outlook for US rates.
"There is the chance that the currency market may move quite dramatically this week," the trader said. The benchmark most distant October gold contract on the Tokyo Commodity Exchange closed down 11 yen, or about 0.5 percent, at 2,409 yen per gram after moving between 2,404 yen and 2,423 yen.
Other months closed down by two to 10 yen. Spot gold was fetching $638.50/$639.50 an ounce, compared with $640.60/$641.60 in late New York on Monday, when it rallied to $641.75, its highest since August 11.
The dollar was fetching 116.10/116.13 yen, little changed from 116.07/116.11 yen in late New York trade. In New York futures, gold rallied nearly 2 percent to close above $640 an ounce, its highest level in 10 weeks, buoyed by pent-up demand after a US holiday weekend as crude oil prices strengthened and the dollar fell sharply from last week.
Sources said they expected gold prices to follow the dollar's lead and to move in a narrow range. December gold at the Comex division of the New York Mercantile Exchange accelerated its gain from trading to end up $11.60 at $640.60 an ounce on Monday.
Elsewhere, TOCOM platinum tumbled in trade in line with the metal's decline in New York. It later recovered some of its losses, but trading remained nervous after last week's wild market fluctuations when it rose as high as 4,547 yen on Tuesday, the highest for a benchmark contract since September 11. Benchmark TOCOM October platinum futures contract finished down 39 yen, or about 0.9 percent, at 4,341 yen, recovering from the day's low of 4,312 yen. Spot platinum was at $1,163/$1,173 compared to late New York levels of $1,140/$1,150 an ounce.