Tokyo gold hits five-week high

Benchmark Tokyo gold futures advanced to a fresh five-week high of above 1,400 yen per gram on Thursday as recent falls in the dollar encouraged investors to buy back the precious metal, traders said.
Renewed geopolitical tensions and an upturned in dollar-based spot precious metals prices also drew healthy short-covering in the yen-denominated market, they said.
"Players in the TOCOM (Tokyo Commodity Exchange) were keenly reacting to the dollar's downtrend and buying back ahead of a long weekend in overseas markets," said Kaman Gokon, manager at Okato Shoji Co Ltd's research section.
The April gold contract on TOCOM closed at a session high of 1,407 yen per gram it's highest since April 19. It was up 10 yen from Wednesday's close of 1,397. Other contracts finished two to seven yen higher.
Spot gold was quoted at $392.25/$393 per ounce against on Wednesday's US close of $388.50/$389.25. "The market is focusing more on bullish factors for gold, especially with the dollar coming under pressure," Gokon said.
"Further gains in (dollar-denominated) gold could push up TOCOM prices in the near term."
Traders said the market was keen to test the upside towards a resistance level of around $395, but operators were careful about expanding long positions heavily ahead of a long weekend in the New York and London markets.
Wariness over security has put pressure on the dollar while encouraging safe-haven buying in gold and other precious metals.
US Attorney General John Ashcroft said on Wednesday that several coming events, including two major US holidays, a Group of Eight summit and US elections in November, could be targets for al Qaeda. The dollar struggled by late Asian trade, slumping around a session low. It was quoted at 111.30/36 yen compared with a late US level of 111.71/79 yen. Metal traders were also keenly watching US economic indicators to determine the fate of US interest rates.
Ahead of next week's US employment figures for May, the market will take a hard look at US initial jobless claims for the week ended on May 22, due. TOCOM platinum also posted solid gains across the board as retail investors showed strong buying interest."Investors were buying back platinum by focusing on its strong fundamentals, while they have been shifting from TOCOM's oil markets as they want to avoid volatility," said a senior trader at a Japanese commodity brokerage.
Last week, Johnson Matthey said the global platinum market was expected to be more or less in balancing this year, with supply possibly exceeding demand for the first time since 1998.