Gold prices in the domestic spot market could gain as their premium over global prices is likely to rise on festival demand. Futures, on the other hand, could be range-bound and may rule marginally higher than global prices.
On Thursday, gold gained in the global market as the US Government shutdown has resulted in a setback to economy. It could now take time to get the economy back on rails and this is likely to delay the US Fed’s plans to prune the $85-billion-a-month stimulus programme.
The effect of the shutdown dragged gold to its lowest against the euro since February.
But there is one word of caution, however. Thursday’s three per cent rise in gold is attributed to two sudden spurts of huge buy orders that lasted a couple of minutes. An answer to this buying could hold cues to gold’s movement over the next couple of sessions.
Festival demand
In India, gold is likely to rule at a higher premium of at least $30/10 gm until festival demand ebbs. Though there is talk of gold imports reviving in the current quarter, it is highly unlikely given the stern RBI guidelines on gold imports which require 20 per cent of every consignment to be re-exported.
In the long-term, gold’s prospects appear a little bearish as holdings in exchange-traded funds continue to drop. World’s biggest gold exchange-traded fund, SPDR Trust, reported further fall in its holdings to 882.23 tonnes.
Spot gold, gold futures
In early trade in Asia, spot gold eased a tad to $1,317.97 an ounce and gold futures for delivery in December to $1,317.50.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) was up at Rs 30,970 for 10 gm and pure gold (99.9 per cent) at Rs 31,120.
On MCX, gold contracts maturing in December continue to trade below Rs 30,000.
Crude oil prices
Crude oil is likely to heat up after China reported a 7.8 per cent growth in its economy. Besides, the ending of US Government shutdown could also aid the rise.
Brent crude for delivery in December quoted at $109.17 a barrel and US crude for delivery in November at $100.77.
China could also be a factor to drive prices higher in the oils and oilseeds complex. China is suspected to have sewn up a majority of three million tonne soyabean export deals from the US and a significant portion of the soyameal deals too.
Concerns over Argentine crop are also driving the counter higher.
Soyabean, crude palm oil
Chicago Board of Trade soyabean for delivery in November was up at $12.95 a bushel. Crude palm oil contracts maturing in January on Bursa Malaysia Derivatives Exchange opened lower at 2,395 ringgit or $760 a tonne.
Higher Brazil quotes for corn (industrial maize), resulting in demand for US corn, besides rains delaying the harvest will help the counter gain. Wheat is also likely to rise on fears that the crop in Argentina and Brazil will face danger from weather-related problems.
CBOT corn for delivery in December ruled at $4.43 a bushel and wheat for delivery the same month at $6.90 a bushel.