Gold edged higher on Tuesday after sentiment for the metal improved following a recovery in US shares the previous day, while Japanese gold futures jumped nearly 1 percent due to the yen's dip against the dollar. Cash platinum rose sharply on technical buying due to the strength in Tokyo platinum futures, which also rose because the yen dropped.
Platinum has come under pressure after Nissan Motor Co said on Friday it had developed a catalyst for gasoline cars that halves the use of precious metal components, including platinum, to clean tail-pipe emissions.
Technical short-covering kept gold prices solid, but the market lacked strong upward momentum as funds remained nervous about taking new positions following recent losses in bullion, with the outlook for global equities markets remaining unclear.
"Trend in precious metals has been set up by share prices recently. Concerns over US supreme mortgage sector continued to limit fund inflows into metals," said Hisaaki Tasaki, market analyst for Ace Koeki Co Ltd Spot gold was trading at $666.00/666.60 an ounce, up from $664.60/665.40 late in New York on Monday.
Dealers kept an eye on the dollar, which slipped against the euro as volatile foreign exchange markets took their cue from weakness in equities and credit markets.
Yet the yen's fall against the dollar helped Japanese precious metals prices. Tokyo Commodity Exchange gold prices rebounded on short covering after closing down in the last six sessions, losing about 5.6 percent over the period.
The benchmark June 2008 contract closed the session at 2,575 yen a gram, up 23 yen or 0.9 percent from Monday's close of 2,552 yen. TOCOM gold moved in a range of 2,574 to 2,580 yen.
On Monday, the key TOCOM gold fell as far as 2,542 yen the lowest for the benchmark since April 3. Spot platinum rebounded, supported by the strength in TOCOM platinum futures. Key June 2008 TOCOM platinum closed session up 30 yen or 0.6 percent at 4,929 yen a gram from Monday's close.
Cash platinum jumped to $1,289/1,294 ounce from $1,268/1,272 in New York. Palladium edged up to $363/368 an ounce from $360/364 on Monday in New York. Silver rose to $12.88/12.91 an ounce from $12.85/12.90 late in New York.