Gold is set to head south on spot and futures market on Thursday after the US Federal Reserve Chairman Ben Bernanke signalled an end to pumping money to buy bonds. This effectively means the stimulus programme to get the US economy will end as the situation seems to be improving. The trend is supported by fall in gold holdings in exchange-traded funds with assets in SPDR gold trust falling to 1,020.07 tonnes.
However, China factory data showing drop in growth could cushion the fall as also any rise in the dollar against the rupee. The US greenback’s rise against the Indian currency makes imports of commodities such as gold, crude oil and vegetable oils costlier.
In early Asian trade, spot gold dropped to $1,360.81 in Singapore, while gold futures maturing in June slipped to $1,359.40.
In the domestic market on Wednesday, gold for jewellery (99.5% purity) was up at Rs 26,445 for 10 gm and pure gold (99.9% purity) at Rs 26,585.
On MCX, gold June contracts could drop to levels of Rs 26,000, while August contracts may fall to around Rs 26,150.
Crude Oil
Crude oil will continue to fall as US stocks continue to rise while supplies have dropped less that what was initially anticipated.
Brent crude July contracts quoted lower at $102.12 a barrel, while West Texas Intermediate (NYMEX) for the same month dipped to 93.67.
Oils and Oilseeds
The oils and oilseeds complex will likely gain on speculation that China is importing more soyabean and crushers in the US have more orders.
Chicago Board of Trade (CBOT) soyabean for delivery in July rose to $14.94 a bushel. Crude palm oil contracts for August delivery on Bursa Malaysia Derivatives Exchange ended at 2,359 ringgit ($781) a tonne on Wednesday.
Grains complex
The grains complex, too, will rise as demand for US corn (industrial maize) exports increased and stocks of ethanol produced from corn dropped to a two-and-a-half year low. Besides, lower availability of ready stocks is also pushing up the counter.
CBOT corn July contracts increased to $6.56 a bushel. Wheat also is tending to rise in sympathy and ruled at $6.90 a bushel.
Rubber
Natural rubber is set to drop as prices on Tokyo Commodity Exchange slipped on fall in prices of crude oil from which its alternative synthetic rubber is produced.
Rubber October contracts dropped to 282.5 yen or Rs 152.30 a kg.