Gold inched up on Tuesday, tracking a weaker US dollar, while Tokyo futures fell on losses in New York's COMEX market and a firm yen. Spot gold inched up to $681.40/682.20 an ounce at 0630 GMT, from $681.00/681.80 late in New York on Monday. It traded within a narrow band.
"It's the influence of the currency market," said Akira Doi, managing director at Daiichi Commodities Co Ltd Dollar-denominated gold prices tend to rise when the US currency falls as it becomes cheaper in other currencies. "The US stock market has been a bit rocky and t two-month low against the yen and hovered near a record low against the euro on Tuesday, pressured by persistent concerns that US subprime mortgage woes would hurt the credit market and the US economy.
Traders said market sentiment remained bearish for the dollar, and players were awaiting United States economic data later in the week for clues on whether problems in the housing sector were spreading to broader economic activity. The dollar was at around 120.52 yen at 0631 GMT, just off a two-month low of 120.41 yen hit on electronic trading platform EBS earlier on Tuesday, the lowest since mid-May.
The euro inched up to $1.3823 from around $1.3810 in late US trading on Monday, and hovered near a record high of $1.3846 struck on EBS on Monday. On Wednesday, the Federal Reserve will release its Beige Book survey of US economic conditions. US existing home sales data for June are also due on Wednesday and new home sales data on Thursday, followed by second-quarter US gross domestic product growth on Friday.
Most active June 2008 gold futures on the Tokyo Commodity Exchange fell 16 yen per gram, or 0.6 percent, to close at 2,670 yen, after moving between 2,667 yen and 2,681 yen.
A stronger yen lowers the value of yen-denominated commodity prices, including gold. The key contract rose to 2,693 yen on Monday, its highest since February 27. The most active December contract on the recently launched "mini" gold futures contract fell 17 yen per gram to 2,654 yen. Doi said players were unlikely to trade actively on TOCOM ahead of Sunday's election for parliament's upper house.
"The repercussions could be significant if the ruling party should lose in a major way," Doi said. Recent polls show that the ruling Liberal Democratic Party was set to lose amid voter anger over bungled pension records and a series of gaffes and scandals by ministers.
Platinum was at $1,327/1,333 an ounce, compared with $1,328/1,332. It rallied to its highest in more than two months at $1,335 in New York on Monday. Silver was largely unchanged at $13.25/13.28 an ounce from $13.23/13.28 an ounce in New York.