Gold held steady on Friday but was within sight of a 1-week low, while Tokyo futures shed the previous day's gains to track losses in New York. Spot gold was at $649.80/650.60 an ounce, steady from $649.30/650.10 late in New York on Thursday, when it hit its lowest in a week at $645.70 on a rising dollar and better-than-expected US services sector data.
Key June 2008 gold futures on the Tokyo Commodity Exchange fell 18 yen per gram to 2,600 yen, having reached an intrude high of 2,618 yen on Thursday on firm oil prices. The dollar held gains against the euro and yen on Friday after a strong reading in US service sector activity data soothed concerns the Federal Reserve may have to cut interest rates later this year.
The Institute for Supply Management's services indexes rose in June to its highest level in a year, beating forecasts for a small decline. Dealers await on Friday's US payrolls data.
The dollar was little moved against the yen from the previous day's late New York trade at 122.95 yen, not far from its 4-1/2-year high of 124.14 yen hit in late June. The euro eased to $1.3590, off a two-month high of $1.3660 hit the previous day. Platinum fell to $1,284/1,289 an ounce from $1,288/1,292 an ounce late in New York. Silver edged up to $12.50/12.53 an ounce from $12.48/12.53 late in New York. Palladium fell to $363/368 an ounce from $364/368.
Gold firmed slightly on Friday ahead of the release of US payrolls data, while Tokyo futures shed the previous day's gains to track losses in New York. In a move seen as bullish for the price of gold, Newmont Mining Corp said on Thursday it scrapped its entire 1.85 million-ounce gold hedge position.
While the announcement sent the shares of the Denver-based gold company, the world's second-biggest producer after Canada's Barrack Gold Co, up 2.3 percent in after-hours trading, it had little immediate impact on gold prices.
Traders said the market appeared to be digesting the news. Spot gold stood at $650.10/$650.70 an ounce, versus $649.30/$650.10 in late New York on Thursday, when it hit its lowest in a week at $645.70 on a rising dollar and better-than-expected US services sector data.
Overall, the market lacked upward momentum, traders said. "The dollar's strength against the euro is also a factor to exert downward pressure on gold," Tatsuo Kageyama, an analyst at Kanetsu Asset Management Co Ltd said. Gold often trades with an inverse correlation to the dollar as some investors use the metal as a dollar hedge.
The release of US payrolls data on Friday, which could boost the dollar's value if figures are better than expected, was also holding back players from trading actively. The most active gold futures contract for June 2008 delivery on Tokyo Commodity Exchange closed the at 2,600 yen, down 18 yen, or 0.7 percent, from Thursday's close.
It traded between 2,597 yen and 2,603 yen. Trade has been range-bound this week, as it hovered around 2,600-2,620 yen. In the currency market, the dollar held gains against the euro and the yen on Friday after a surprisingly strong reading in US service sector data soothed concerns the Federal Reserve might have to cut interest rates later this year.
The dollar stood at around 122.95 yen, little changed from the previous day's late New York trade, and not far from its 4-1/2-year high 124.14 hit in late June. US crude oil held steady at around $71.80 a barrel, altering touching $72.35, a day ago, the peak since August, as fresh violence in Nigeria added to fears of a possible supply tightness in United States, the world's top consumer.
Cash platinum traded at $1,285/$1,290 an ounce, down from $1,288/$1,292 in late New York. Spot silver was quoted at $12.50/$12.54 an ounce, versus $12.48/12.53 in New York. Spot palladium fetched $363/$368 an ounce, compared with $364/368.