Dollar surge seen lifting gold

Gold is likely to gain on Friday as the dollar surges against other currencies following favourable data from the US.

Though data showed things are improving only at a marginal pace, they point to a trend where the US seems to be faring better than either Europe or Japan. This saw the greenback rising to a four-month high against the yen early on Friday, while it was up against the euro for the third consecutive day.

A rise in the dollar will make imports dearer and this will reflect in the Indian market. Festival and marriage season buying will add to the momentum.

In Singapore early on Friday morning, gold was quoted at $1,712.18 an ounce. Gold for delivery in December rule was at 1,713.20.

In the domestic market, gold for jewellery (99.5 purity) ended at Rs 30,765 for 10 gm on Thursday. Pure gold (99.9 purity) closed at Rs 30,900. Both dropped marginally.

Late tonight, the dollar’s movement will depend on the US GDP report that is forecast to grow 1.7 per cent in the third quarter.

Oils and oilseeds market could see muted trading on Friday with the benchmark Malaysian palm oil market closed for Id-ul-Aadha or Bakrid. Still, prices could be range-bound with contrasting factors of a rise in dollar and fall in soyabean prices on the Chicago Board of Trade (CBOT) coming into play.

Rising dollar could make imports of vegetable oils costlier. India imports nearly 10 million tonnes.

On CBOT, soyabean for delivery in November dropped to $15.64 a bushel, while crude palm oil for January delivery on Bursa Derivatives Exchange in Malaysia closed at 2,603 ringgit ($857) a tonne on Thursday.

Wheat and industrial maize (corn) are likely to come under pressure on cues from the global market. But export prospects could prevent any sharp fall in these.

Corn for delivery in December on CBOT slid to $7.42 a bushel, while wheat for delivery in the same month dipped to $8.72-3/4 a bushel.

Brent oil is likely to gain on rise in the global market. A powerful storm, Hurricane Sandy, could affect crude oil refinery operations in the North-East of the US. It is currently some 250 km of the Cuban coast. Brent crude for delivery in December was last quoted at $108.49 a barrel, while NYMEX crude was up at $86.04 a barrel.

This could also see rubber gain in spot and futures market.

Sugar, after gaining on Thursday, could rule steady. Raw sugar for delivery in March ended lower on ICE U.S. at 19.53 cents a pound. White sugar for delivery in December in London declined to $543.80 a tonne.