Gold prices in the domestic spot and futures market are likely to be range-bound, awaiting clear signals from the global market.
The precious metal in the global market looked to be under pressure on bets that the US Federal Reserve could begin tapering its $85-billion-a-month programme soon. A slew of data expected this week will dictate the agenda for the US Fed meeting slated during December 17-18.
Early on Monday morning, China’s factory data were reported at 50.8, higher that expectations. However, they are lower than 50.9 reported for October. But Chinese factories have got robust orders that could see growth in manufacturing improving.
Later in the day, similar data is expected from Europe and the US.
Spot gold, gold futures
By mid-day in Asia, spot gold slipped to $1,246.79 an ounce and gold futures maturing for delivery in February to $1,246.10.
In the domestic market on Saturday, gold for jewellery (99.5 per cent) purity eased to Rs 30,690 for 10 gm and pure gold (99.9 per cent) to Rs 30,840.
Factory determining gold movement
Two factors will determine the movement in domestic gold price. One is the currency movement as any weakening of the rupee against the dollar will make import of gold, crude oil and vegetable oils costlier. Two is the wedding season heading towards an end, thus dampening demand.
On MCX and NCDEX, gold futures are likely to range between Rs 30,000 and Rs 30,500.
Factory output growth
A better growth in factory output in China and hopes of similar growth elsewhere in the world are likely to drive crude oil prices higher.
Brent crude contracts maturing for delivery in January were up at $110.18 a barrel and US crude at $93.17.
The oils and oilseeds market may head north as demand for US soyabean is high. Malaysia’s palm oil stocks are also expected to be lower than expected, while Indonesia’s bio-fuel policy is boosting the demand for the oil.
The US Department of Agriculture has reported higher exports of soyabean.
Soyabean, crude palm oil
Chicago Board of Trade soyabean for delivery in January rose to $13.43 a bushel.
Crude palm oil for delivery in February opened lower at 2,642 ringgit or $820 a tonne.
Record corn harvest
Corn (industrial maize) is likely to head south on prospects of higher stocks, while wheat could gain on demand from various nations. In India, too, a similar trend is likely to prevail as various Government agencies look to export wheat. Corn prices are under pressure from a record kharif harvest.
CBOT corn for delivery in March fell to $4.24 a bushel and wheat for the same month to $6.72 a bushel.