Gold will likely to rule range-bound in the domestic market on Wednesday, caught between rising physical demand and improving equities market. The equities market is seeing a rebound on hopes of economic recovery. This could sway investors away from gold as their risk appetite increases.
However, the current lows are also attracting physical buying, especially in India. Hopes of banks continuing to inject money to buoy the economy is also holding up the yellow metal.
In early trade at Singapore, spot ruled at $1,579.65 an ounce. Gold April contracts rose to $1,578.90 in the futures market.
In the domestic market on Tuesday, gold for jewellery (99.5% purity) ended up at Rs 29,620 for 10 gm and pure gold (99.9% purity) at Rs 29,755. Gold gained in the domestic market on Tuesday since the rupee fell against the dollar making imports of commodities such as gold, crude oil and vegetable oils costlier.
Soyabean, crude palm oil
The oils and oilseeds complex is likely to rally as soyabean rose on the Chicago Board of Trade (CBOT) following perked up buying by China from the US.
Overnight, soyabean for delivery in May was up at $14.66 a bushel. On Bursa Malaysia Derivatives Exchange, palm oil May contracts ended lower on Tuesday at 2,389 ringgit ($770) a tonne.
Domestic rabi arrivals, however, are likely to dampen the sentiments.
The grains complex, particularly wheat, will likely rise after corn, primarily used for fodder and fuel, rose above it.
As farmers in the US held on to depleting stocks, corn on CBOT for delivery in May was up at $7.09 a bushel. Wheat contracts for May were up at $7.06 a bushel but there is more headroom for it to move higher.
Crude oil
Brent oil could continue to rule firm as the North Sea pipeline system is still closed.
Brent oil April contracts were quoted higher at $112.23 a barrel and NYMEX crude at $91.11.
Natural rubber could stand to gain as its alternative, synthetic rubber derived from crude oil is also seen ruling firm.