Gold prices in the domestic spot and futures market could decline as tensions over Syria have eased and data from the US and Japan are seen as indicators of the revival in economy.
Action against Syria
The US is unable to garner support to take action against Syria and its President Barack Obama is unable to prove the use of chemical weapons by the Syrian Army.
In the UK, parliamentarians are up against any action against Syria. All this will mean there were will be a lot of noise sans action. Still, anything to do with geo-political tensions could drive gold up.
US economic growth
On the other hand, data on US economy showed growth, giving rise to speculation that the $85 billion-a-month stimulus package could head towards a wind-up. However, this has perked up the dollar and this, in turn, could pressure rupee.
Any fall in the rupee, which recovered on Thursday, could make import of gold, crude oil and vegetable oils costlier. Any fall in the Indian currency on Friday could limit the fall in the yellow metal.
Spot gold, gold futures
In early Asian trade, spot gold in Singapore was up marginally at $1,408.17 an ounce and gold futures maturing in December at $1,407.90.
The domestic bullion market was closed for Janmashtami on Thursday. On MCX, gold October contracts could drop.
Meanwhile, holdings in world’s largest gold exchange-traded fund, SPDR Trust, remain unchanged at 921.03 tonnes.
Brent, WTI crude
Crude oil is also likely to head south as the geo-political tensions over Syria that threatened supplies in West Asia eased.
Brent crude for delivery in October ruled lower at $114.37 a barrel and West Texas Intermediate crude for the same month to $107.55.
Severe heat conditions and lack of rains in soyabean growing regions in the US could drive oils and oilseeds higher.
The US drought monitor report said that 25 per cent of Iowa is facing drought conditions, while 20 per cent Illinois, too, faces drought. Temperatures hovered near 38 degrees Celsius and this could affect soyabean yield as the number of seeds in a pod could decline besides the weight of the seed.
In India, continuous rain since June in the soyabean growing areas is threatening to nullify the advantage of higher area under the crop.
Soyabean, crude palm oil
Chicago Board of Trade soyabean futures maturing in November ruled at $13.49 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in November opened lower at 2,409 ringgit or $730.25 a tonne.
The drought in Illinois and Iowa in the US could also affect the yield of corn (industrial maize) and hence, the grains complex could be seen gaining.
Corn, wheat futures
CBOT corn futures maturing in December ruled at $4.77 a bushel and wheat for delivery the same month quoted at $6.53 a bushel.
Natural rubber could see gains in the futures market while prices on the spot market could rule firm. This is because data show economic revival in Japan and the US.
The rupee’s fall could also reflect on rubber prices since import rates seem to be rising to a par.
On the Tokyo Commodity Exchange, rubber futures maturing in February were up at 272.5 yen or Rs 184.50 a tonne.