A rising dollar is likely to help gold recover in the domestic market on Monday as the yellow metal pared its losses marginally in early trade.
A strong dollar against the rupee will make imports costlier, while the precious metal had dropped to a two-month low during the weekend on a strong show by the US on the employment front. The better jobs data mean that the US Fed may not think of easing its monetary policy further.
In early trade, spot gold was up at $1,681.25 an ounce against Friday’s close of $1,675.20. On Friday, the yellow metal slid $40. US gold gained 0.4 per cent at $1,681.60.
On Saturday in Mumbay, gold for jewellery (99.5 purity) slumped 10 per cent to Rs 30,380. Pure gold (99.9 purity) tumbled to Rs 30,500.
Early on Monday morning, the dollar was up at its highest since September first week against major currencies. Investors are switching over to the US greenback in view of the rising dollar and uncertainty over the presidential elections in the US slated for tomorrow.
With the Centre announcing a higher minimum support price for cotton and market intervention operations by buying 90 lakh bales (0f 170 kg each), cotton prices in spot and futures market are set to gain.
A rising dollar and higher closing on ICE U.S. will also be handy in the counter rising. Cotton for delivery in December on ICE U.S. closed up at 70.35 cents a pound.
The oils and oilseeds market could gain on higher closing of soyabean on the Chicago Board of Trade and a strong dollar. Reports of demand from China could also play a part in the rally. On Friday, soyabean for delivery in January was up for the second consecutive day at $15.60 a bushel.
Malaysian palm oil, however, closed lower at 2,496 ringgit ($818) a tonne. Festival demand is also likely to aid a rise in prices.
Wheat is seen gaining as Indian government agencies are likely to finalise export tenders. Concerns over global weather have also aided the uptrend. During the weekend, wheat on CBOT for delivery in December ended higher at $8.68 a bushel.
Corn (industrial maize) is likely to face pressure on technical correction and reports of ethanol plants downing shutters in the US. On CBOT, corn for delivery in December slid to $7.53 a bushel.
Sugar could gain on demand for festivals and the usual buying at the start of the month. A weaker rupee will make exports competitive and this could also help the counter gain. Raw sugar futures on ICE U.S. for March ended higher at 19.41 cents a pound, but white sugar in London slid to $535.50 a tonne.
Crude oil is seen range-bound with rise in the dollar being offset by doubts being cast over demand growth. On Friday, Brent oil, the benchmark for oil prices, ended up at $108.19, while NYMEX crude slipped to $86.00 a barrel