The key gold futures contract on the Tokyo Commodity Exchange (TOCOM) briefly hit a low of 1,425 yen per gram but met solid bids around that level, with firm spot bullion adding support for TOCOM gold, they said.
"A higher dollar pressured gold, but if the market had believed that the dollar's upturned was sustainable then spot gold would be lower, probably around $398 by now," said Kaman Goon, research section manager at Okato Shoji Co Ltd.
TOCOM gold for August 2005 delivery closed up 2 yen at 1,437 yen. Other contracts were unchanged to up 4 yen. The April contract fell 3 yen at the close. Spot gold was quoted at $404.25/5.00, up from Friday's New York level of $402.85/3.60.
Spot gold was put under pressure on Friday after surprisingly strong US economic data revived prospects that the Federal Reserve would continue to raise US interest rates. The Final University of Michigan consumer sentiment indexes for August fell to 95.9 from 96.7 in July, but exceeded the 94.0 reading expected on Wall Street.
This bolstered confidence that the economy was emerging from a sluggish period. US gross domestic product grew an annualised 2.8 percent in the second quarter, in line with economists' forecasts.
The market was careful about taking new positions ahead of August US job data due on Friday.
The attention on the payrolls data is strong after a surprisingly weak number for July, which showed US non-farm payrolls rose just 32,000 against analysts' forecasts of a rise of slightly more than 200,000.
A Reuters poll of analysts returned a consensus expectation of 150,000 jobs added in August. Market players were also reluctant to go short of gold since it gained safe-haven appeal after two planes crashed almost simultaneously in Russia last week, traders said.
The safe-haven attraction has also been bolstered by security concerns related to the Republican convention, which begins in New York later in the day, to officially launch President George W. Bush's re-election bid.
The dollar strengthened to around three-week highs on the euro, standing around $1.2000 in late Asian trade. Against the yen, the greenback stood around 110.25/30. TOCOM platinum fell on technical selling after hitting a 1-1/2 week high on Friday, but its underlying trend was bullish, traders said.
The benchmark August 2005 TOCOM platinum contract closed at 2,927 yen per gram, down 8 yen from Friday's close. It had moved in a range of 2,910 to 2,946 yen.
Other contracts closed down 5 to 10 yen, except for the prompt October contract, which rose 3 yen. Spot platinum was quoted at $858/$863 per ounce compared with $862/$867 in New York.
Traders said the technical trend for TOCOM platinum stayed strong after it broke through a key resistance level last week, with end-users also looking for chances to buy physical platinum on dips.
"We've detected light buying from end-users in the physical market," said a trader at a Japanese commodity brokerage. "End-users may be starting to step in on the view that it may take a while before the spot price falls to around $800 again."
Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.