Gold near 1-week high, Tokyo Commodity Exchange up nearly 2%

Gold near 1-week high, Tokyo Commodity Exchange up nearly 2%
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First Published: Mon, Aug 27 2007. 09 12 AM IST
Updated: Mon, Aug 27 2007. 09 12 AM IST
Tokyo, 27 Aug Gold was steady today, staying within sight of last week’s high, while the benchmark Tokyo futures contract rose nearly 2% to its highest in more than a week due to a weaker yen and a strong New York close.
Platinum and silver on the Tokyo Commodity Exchange also climbed to their highest level in more than one week.
Spot gold was little changed at $667.60/668.40 an ounce at 0300 GMT, compared with $667.70/668.50 late in New York on Friday 24 August, when a jump in stock markets and a drop in the dollar pushed up the metal to its highest since 15 August at $669.10 an ounce.
Some traders said a sense of caution had crept into the market after gold ended up more than 1% on 24 August on a rise fuelled by technical, options-related buying rather than fresh news.
Koji Suzuki, market analyst at Kazaka Commodity Co. Ltd., said he believed it was too early to say that the subprime issue and credit worries, which led to a broad sell-off in financial markets, were over.
“There is a sense of optimism in the market, but I think it will take a little longer to be able to say the situation has really calmed down,” Suzuki said.
Problems in the US housing sector, stemming from the advancing of home loans to people with poor credit history, spread to global credit markets sparking fears of a liquidity crunch.
“I think this week we will get a better idea of whether there will be a recovery in riskier assets,” he said.
Most active June 2008 gold futures on the Tokyo Commodity Exchange rose to 2,526 yen, its best level since 16 August, before closing the morning at 2,520 yen, up 45 yen or 1.8%, from Friday’s close.
The yen fell on Monday after a continuing recovery in global stocks renewed investor appetite for riskier bets, including those that involve selling the low-yielding Japanese currency for assets in higher-yielding ones.
The dollar rose to as high as 116.76 yen pulling further away from a 14-month low of 111.60 yen just over a week ago.
The euro traded at $1.3675 after matching a two-week high of $1.3683 in early Asian trade.
The benchmark TOCOM June 2008 platinum contract rose 34 yen per gram to finish the morning at 4,598 yen, while key TOCOM June 2008 silver contract closed at 448.9 yen per 10 grams, up 12.8 yen.
The Nikkei average rose by about 1% in Monday’s morning session, buoyed by Wall Street gains and a weaker yen.
Platinum was at $1,244/1,249 an ounce, steady from $1,243.90/1,250.90 late in New York.
Palladium rose to $326/331 an ounce from $321.50/324.50 late in New York.
Silver was little changed at $11.92/11.95 from $11.93/11.96 an ounce.
In industry news, the Tokyo Stock Exchange plans to list a gold exchange traded fund (ETF) that will be backed by bullion in spring 2008, the Japanese financial daily Nikkei said today.
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First Published: Mon, Aug 27 2007. 09 12 AM IST
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