Gold prices on the domestic spot and futures market are likely to be range-bound on Tuesday but factors such as currency movement and the Syrian unrest could weigh on the market depending on the developments.
The Indian rupee continues to be under pressure and any further fall against the dollar will make import of gold, crude oil and vegetable oils costlier.
The Obama administration has approached the Congress for supporting action against Syria, which is alleged to have used chemical weapons. Going by initial reports, the Congress may not approve of the action.
In that eventuality, gold could come under pressure. Gold will also pause for direction until late Wednesday when the US trade balance data is expected.
It could signal if the US Federal Reserve would be emboldened to cut its $85-billion-a-month stimulus package later this month.
Spot gold, gold futures
In early trade in Asia, spot gold ruled at $1,391.85 an ounce and gold futures for delivery in December at $1,391.90.
Holdings in SPDR Trust, world’s largest gold-exchange traded funds, dropped marginally to 921.03 tonnes.
In the domestic market on Monday, gold for jewellery (99.5 per cent purity) dropped to Rs 31,540 for 10 gm and pure gold (99.9 per cent purity) toRs 31,685.
On MCX, gold October contracts could rule between Rs 32,500 and Rs 33,250.
Brent, WTI crude
Crude oil is also likely to trade sideways as concerns over Syrian tension ease.
Brent crude October contracts quoted at $114.19 a barrel and West Texas Intermediate contracts for the same month at $106.65.
The oils and oilseed complex is set to rule firm on bets that lack of rain in the US Midwest could hurt soyabean yields. Late plantings and threat of frost are also keeping the bulls interested. Besides, a rise in Malaysian palm oil exports is aiding the uptrend.
Soyabean, crude palm oil
Chicago Board of Trade soyabean contracts maturing in November rose to $13.85 a bushel. On Bursa Malaysia Derivative Exchange, crude palm oil contract for November opened lower at 2,420 ringgit or $741.25 a tonne.
Fear over weather hurting the corn (industrial maize) crop in the US is haunting the grains complex. It could further drive up grains prices in the futures.
Corn, wheat futures
CBOT corn for delivery in December was up at $4.85 a bushel. Wheat contracts maturing in December ruled at $6.54 a bushel.
Natural rubber futures could rise as a lower yen pushed up prices on the Tokyo Commodity Exchange. A fall in the rupee will perk up spot prices as imports could be a costlier proposition.
On Tokyo Commodity Exchange, the February contracts were up at 283.7 yen or Rs 188.15 a kg.