Tokyo gold futures stayed largely flat on Monday after bullion lost some of its lustre to a firmer US dollar, but traders said market sentiment remains strong. The benchmark October gold contract on the Tokyo Commodity Exchange (TOCOM) finished down one yen per gram at 1,498 yen after moving narrowly between 1,497 yen and 1,502 yen.
Other months were either flat or moved by just one yen. "The top fundamental factor moving gold now is the currency market," one Tokyo analyst said. There is a clear shift from dollar assets to gold assets as the decline value of the US currency drives investors to place their money in the precious metal, he said.
The dollar will probably fall below 100 yen sooner or later, keeping gold's strength intact, he said. The October contract rose as high as 1,505 yen last on Thursday, the highest for the benchmark contract since August 3, 1992, when prices marked a high of 1,509 yen.
Tokyo gold prices have softened since then. The dollar inched up on Monday, backtracking from record lows hit against the euro on disappointing US jobs data.
Currency traders, however, believe that the dollar's rise is temporary and that it is only a matter of time before the market begins selling the currency again.
The dollar was fetching 102.24/29 yen, against US levels late on Friday of 102.04/07 yen.
Total TOCOM gold turnover was estimated at modest 46,570 lots, down from Friday's 60,543 lots.
In the spot market, bullion was fetching $454.75/5.50 an ounce at TOCOM's closing bell, compared with $455.55/456.20 last quoted in New York. The dollar's modest recovery against the euro and the yen trimmed less than $1 off gold, which jumped nearly $6, an ounce late on Friday.
The benchmark October platinum futures contract closed down eight yen per gram at 2,774 yen after moving within a range of 2,757 yen to 2,781 yen. Spot dollar-based platinum was at $869/874, compared to New York levels of $868/872 an ounce.
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.
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