TOKYO, April 20 (Reuters) – Tokyo rubber futures dropped below 170 yen per kg to a two-week low, falling for a third straight session as a retreat in oil and gold prices sapped investor appetite for the industrial commodity.
* A speedy, chart-led rally for rubber futures stopped at a touch below 180 yen last week, and traders and investors have since hurried to lock in profits.
* The key Tokyo Commodity Exchange rubber contract for September delivery <0#JRU:> ended at 165.5 yen, down 5.8 yen or 3.4 percent from Friday, when it closed at that day’s low of 171.3 yen.
* On Monday its intraday low was 164.5 yen, the lowest level since April 3.
* “It’s a correction of an overbought market,” said a manager at a Japanese commodity brokerage.
“Friday’s close at the day’s low dampened the market’s mood. But I think the main drag was a sell-off in precious metals and energy markets,” he said.
* The benchmark is currently down 8 percent from a five-month high of 179.7 yen marked on April 13. The manager said it may find a technical floor around 160 yen.
* U.S. oil futures fell as much as 2 percent towards $49 a barrel on Monday, weighed down by a rising U.S. dollar and growing caution about the pace of any global economic recovery. [O/R]
* Spot gold stayed near a three-month low hit late last week as investors remained cautious about demand after the holdings of the world’s largest gold-backed exchange-traded fund fell by the largest margin in 6-½ months. [GOL/]
* The euro struck a one-month low against the dollar and a three-week low versus the yen due to uncertainty over policy steps the European Central Bank may take. Against the yen, the dollar fell 0.4 percent to 98.80 yen . [USD/]
* A firming yen versus the dollar deflates yen-based rubber futures prices. But few rubber traders expect the dollar to fall below 95 yen.
* Tokyo’s Nikkei 225-share average <.N225> managed to erase earlier losses and nudged up 0.2 percent by the close. [.T]
* Physical rubber prices were mostly unchanged.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH FRIDAY
Grade Price Change
Thai RSS3 (May) $1.70/kg unchanged
Thai RSS3 (Jun) $1.70/kg unchanged
Thai STR20 (May) $1.66/kg unchanged
Thai STR20 (Jun) $1.66/kg unchanged
Malaysia SMR20 (May) $1.63/kg unchanged
Malaysia SMR20 (Jun) $1.63/kg unchanged
Indonesia SIR20 (May) $0.69/lb -$0.01
Indonesia SIR20 (Jun) $0.69/lb -$0.01
Thai USS3 53.5 baht/kg unchanged
Thai 60-percent latex (drums, May) $1,320/tonne unchanged
Thai 60-percent latex (bulk, May) $1,200/tonne unchanged

Source: Reuters

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