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Gold prices in the domestic spot and futures market may drop after the yellow metal slipped in the global market to a month’s low.
Speculation is rife that the US could begin cutting its $85-billion-a-month economic stimulus programme from as early as next month.
However, two US Federal Reserve officials — Federal Reserve Bank of Atlanta President Dennis Lockhart and President of Minneapolis Fed Narayana Kocherlakota — said that the policy should continue to help further growth and ensure full employment.
In India, gold prices have been surging despite the downtrend in the global market mainly owing to the rupee’s weakness. Besides, supply-side woes are ensuring premium for gold in India.
However, with prices topping Rs 31,000 for 10 gm, demand could be restricted. That, in turn, could lead to some softening of prices.
Rupee movement
The rupee’s movement will also be a factor in ensuring how gold progresses since any fall in the Indian currency against the dollar will make import of gold, crude oil and vegetable oils costlier.
Gold holdings in exchange-traded funds, particularly world’s largest SPDR Trust, were unchanged.
Spot gold, gold futures
In early Asian trade, spot gold traded at $1,269.44 an ounce and gold futures contract maturing in December at $1,268.50.
Gold for jewellery (99.5 per cent purity) in the domestic market was up at Rs 31,180 for 10 gm and pure gold (99.9 per cent purity) at Rs 31,330.
On MCX and NCDEX, gold December contracts are likely to slip towards Rs 30,000.
Crude oil stockpiles
Speculation that crude oil stockpiles in the US are likely to show an increase will drag crude oil. With supplies worries and geo-political tensions getting over, there is further pressure on the commodity.
Brent crude for delivery in December quoted at $106.02 a barrel and US crude for the same month at $93.17.
Edible oil, oilseeds
Edible oils and oilseeds are likely to edge higher with Chinese demand being the main driver. China has bought over one lakh tonnes of soyabean from the US.
The Chinese Commerce Ministry sees soyabean imports touching six million tonnes. Uncertainty over South American soyabean crop is also likely to keep the counter firm.
Chicago Board of Trade soyabean contracts maturing for delivery in January were up at $13.13 a bushel. Crude palm oil January contracts on Bursa Malaysia Derivatives Exchange opened lower at 2,597 ringgit or $810 a tonne.
Wheat, corn futures
Higher production and lower-than-expected exports from the US are likely to keep the grains complex under pressure. While corn (industrial maize) production and carryover stocks are expected to rise sharply, wheat demand has slowed.
CBOT wheat January contracts were down at $6.46 a bushel and corn contracts for the same month at $4.32 a bushel.
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