【Fujitomi】Tokyo gold falls after NY gold plunges, as investors sour on the drop

（Tokyo crude oil and petroleum products）
On the 2nd, Tokyo crude oil and petroleum products are sold as overseas crude oil prices decline. The front-month crude oil October futures are 2,410 yen lower than the previous day at 35,610 yen, the front-month gasoline November futures are 200 yen lower at 48,480 yen, and the front-month kerosene November futures are 160 yen lower at 48,370 yen.
As demand remained weak, WTI and Brent were sold again overnight, resulting in a sell-off centered on crude in the Tokyo market. In Tokyo, gasoline and kerosene, which had been aggressively bought the day before in anticipation of GW demand expansion, were holding their declines. In daytime trading, the declines continued to narrow as before. The morning drop has continued since last week, providing a buy-the-short-term opportunity. Today, a weaker yen was a supportive factor, but the continued rise in the Nikkei 225 index made the yen weaker, turning stock prices into a day-trader gauge. However, once the weak Chinese manufacturing PMI was announced, the yen’s weakness was tempered, and the aggressive buying in Tokyo’s oil market was unwound, and selling resumed. NY gasoline continued its decline without restraint. Therefore, attention was drawn to U.S. EIA stock data not only for crude production but also for gasoline demand. Unless demand improves, WTI and Brent are expected to continue to fall. It is necessary to assess supply and demand rather than inventories and prepare for GW after the holidays. Toward the close, the decline narrowed as the dollar briefly moved into the 112 yen area.

（Tokyo precious metals）
On the 2nd, Tokyo gold fell after NY gold plunged. Front-month April gold futures are 11 yen lower at 4,509 yen, front-month April platinum futures are 12 yen lower at 3,366 yen.
NY gold plunged as NY silver fell sharply, causing Tokyo gold to retreat. In overnight trading, it dipped below 4,500 yen, but in daytime trading, aided by a rebound in NY gold, it stayed in the 4,500 yen range. In a weak-yen scenario, it briefly returned to exactly 4,510 yen, but when the weak Chinese manufacturing PMI was released, the yen’s weakness paused, and Tokyo’s gold at 4,510 yen was only temporary. Tokyo platinum continued to fall with no bottom in sight. A lack of reference bottom due to NY platinum’s lower price exploration leaves no clear bottom. As before, the selling stance remains intact. Wherever it goes, it should be met with selling, and the real decline is expected to occur after June. Now, Tokyo gold will focus more on the Iran presidential election on the 19th rather than events during Tokyo’s holiday. Geopolitical risk is suspected to affect important political events. Just before 15:00, the dollar rose to the 112 yen area again, and Tokyo gold briefly retook 4,510 yen.

（Tokyo Rubber）
On the 2nd, Tokyo rubber surged due to short-covering before the holiday. Front-month October futures are up 6.1 yen at 221.7 yen.
Although Tokyo rubber had been recovering overnight, during daytime trading the gains widened, with the front month rising to 223.9 yen at one point around 10 o’clock. The post-holiday rise in Shanghai rubber was supportive, but previously, the Nikkei’s sharp rally also encouraged buybacks in Tokyo rubber ahead of GW, causing a surge in late-holiday buying. Shanghai rubber after the holiday appeared to rise on shrinking inventories, while in a weak-fundamental environment, Tokyo’s selling pressure intensified. By midday, the upside paused, and it hovered around 222 yen for a while. It then recovered to the 223 yen range but the gains paused. Weak Chinese economic indicators were released, but because the advance was already in motion, selling exhaustion was felt in the market. The yen’s weakness toward the end of trading did not provide support.

（Tokyo Corn）
On the 2nd, Tokyo corn continued to rise, buoyed by a sharp rally in Chicago. Front-month May futures are up 300 yen at 22,300 yen.
With Chicago’s gains extending, Tokyo overnight continued higher. Chicago wheat surged and concerns about late planting of corn supported prices. In the morning, it extended gains further, but as Chicago’s decline returned, the gains cooled, and after hitting 22,290 yen, they softened to around 22,210 yen, then in the daytime rose to 22,300 yen. Chicago’s rebound from a previously lower level prompted renewed buying, as futures found a new footing. Following a stronger revival in Chicago soybeans and wheat, Chicago corn also recovered. Expectations that planting progress would exceed forecasts led to a pullback in Chicago, but as funds bought back, selling pressure did not become decisive.

（Tokyo U.S. soybeans）
On the 2nd, Tokyo general-purpose soybeans were mixed. Front-month April futures are up 430 yen at 46,880 yen.
With Chicago continuing to rise after the reopening, Tokyo futures remained firm. Chicago soybeans exceeded the previous day’s high, triggering stop-buying. As Chicago trading hours begin, South American selling might affect prices. With improving weather in the U.S. Corn Belt, after GW, a spike in selling is anticipated. Toward the close, front-month futures faced selling pressure and lost ground into negative territory.
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