Gold extended gains on Wednesday as a soft dollar encouraged buying, while Tokyo futures tracked bullion to hit a fresh 22-½ year high.

By 2:30 a.m. EDT, spot gold was at $740.80/741.60 an ounce, versus the late New York level of $736.60/737.40.

Market players are keenly sensitive to the resistance level of $750, said Tatsuo Kageyama, analyst at Kanetsu Asset Management.

He said traders were cautious about actively buying the precious metal before the release of key economic data which could influence the currency market, currently the main force driving gold's direction.

Funds' net long positions are near record-high levels, and profit taking could hit the market any time, Kageyama said.

In the currency market, the euro was steady at $1.4111, having rebounded from Tuesday's two-week low of around $1.4015 but well off a record high of around $1.4280 hit on Oct 1.

Investors awaited further clues on whether the U.S. Federal Reserve will cut interest rates later this month, and caution set in ahead of a meeting of Group of Seven finance ministers next week.

The dollar was little changed at 117.15 yen.

The key August 2008 gold contract on the Tokyo Commodity Exchange closed up 43 yen, or 1.6 percent, to 2,822 yen per gram, the day's peak and the highest for any benchmark since April 1985.

TOCOM platinum rose in line with gold, with the benchmark August contract closing at the day's high of 5,122 yen per gram, up 76 yen, or 1.5 percent.

Last week Japan's Mazda Motor Corp said it had developed a catalyst for cars that employs a technology which slashes platinum and palladium use by 70-90 percent, but this news was having little impact on prices.

Kageyama said the technology was not going to be applied immediately in manufacturing cars.

So far the impact on the market has been nil, he said.

London-based ETF Securities said it will launch a range of exchange-traded commodities (ETCs) on the London Stock Exchange on October 10, allowing access to commodity futures at differing maturities.

In labor news South Africa's biggest mining union, the National Union of Mineworkers, was mulling a one-day strike this month to protest against deaths and accidents at mines, a senior union official said on Tuesday.

Platinum rose to $1,372/1,376 an ounce from $1,363.50/1,370.50 in New York.

Palladium was at $363/367 an ounce versus $362/366 in New York.

Silver climbed to $13.50/13.55 an ounce from $13.46/13.51 late in New York

Precious metals prices at 2:46 a.m. EDT

Metal Last Change Pct chg YTD pct chg Turnover

Spot Gold 739.80 2.20 +0.30 16.38

Spot Silver 13.51 0.05 +0.37 5.14

Spot Platinum 1372.00 7.00 +0.51 21.20

Spot Palladium 362.00 0.50 +0.14 9.04

TOCOM Gold 2822.00 43.00 +1.55 15.42 81812

TOCOM Platinum 5122.00 76.00 +1.51 20.40 42946

TOCOM Silver 513.30 13.30 +2.66 4.05 2169

TOCOM Palladium 1390.00 19.00 +1.39 10.76 629

Euro/Dollar 1.4112

Dollar/Yen 117.37

TOCOM prices in yen per gram, except for silver which is in yen per 10 grams, spot prices in $ per ounce.