Japan Report Boosts Gold

Gold futures prices advanced strongly Friday on a report that Japan will need 200 metric tons of the metal for a commemorative coin honoring the 60th anniversary of Emperor Hirohito’s rule, analysts said.

Prices on the Commodity Exchange in New York were up by about $10 an ounce before the gains were cut in half by the close.

While the Japanese needs weren’t universally accepted as the reason for the run-up in gold futures, most analysts said this appeared to be the main factor.

It came as no surprise that Japan would be needing gold, said John Norris, chief trader in New York with City Bank’s precious metals division, but this was the first time it was known how much would be bought.

However, Richard Morose, a gold and silver trader in Chicago for Geldermann Inc., said the fact that Japan would be buying gold for the commemorative coin has been known for too long to account for Friday’s strength on the futures exchange. “That’s why gold has been high for the last couple weeks,” he said.

Morose attributed Friday’s moves to a large speculator coming to the belief that there were an excessive number of longs in silver and shorts in gold.