Tokyo gold futures fell slightly on Thursday as weaker crude oil encouraged position unwinding by market participants ahead of the end-March fiscal book closings.
Investors were seen mostly reluctant to buy before fresh money inflows expected in April, and also because the yellow metal's short-term outlook was mixed given the firmness in the yen on one hand and lingering security concerns and favourable Technicals on the other. A higher yen effectively deflates the yen-based contracts.
The benchmark gold futures contract for February 2008 delivery on the Tokyo Commodity Exchange finished the session at 2,525 yen a gram, down 10 yen or 0.4 percent from the previous close. Other contracts were down 3 yen to 13 yen. Gold also fell in spot trading, tracking weaker crude oil. Gold bullion had reached a four-week high of $669.50 an ounce in New York on Wednesday on tensions between Iran and the West and concerns about a slowing US economy.
"Things do not look so simple now. You would neither buy nor sell given risks on both sides," said Kaname Gokon, deputy general manager at Okato Shoji Co Ltd's research section. "I guess it's a safe bet to buy at $660 but you would lose some money if you buy at $670," he said. Spot gold traded at $665.20/666.20, down slightly from $666.10/666.66 in late New York trade. US crude oil slipped below $64 a barrel in Asia on Thursday after briefly topping $68 to a six-month high earlier this week on tensions surrounding Iran, the world's fourth-largest oil producer.
US crude had been on a six-day upturned until on Wednesday after Iran seized British sailors in the Gulf and because of US naval exercises there. Elsewhere, key February TOCOM platinum futures finished the at 4,603 yen a gram, down 8 yen or 0.2 percent from the previous close. Benchmark silver futures for February delivery stood at 500.8 yen per 10 grams, down 0.7 yen or 0.1 percent.