Gold prices on spot and futures market are likely to be range-bound on Friday caught between various factors.
Speculation that the US Fed will continue its stimulus package kept interest in gold in tact. But falling investors’ holding in gold-backed exchange-traded funds, rising dollar and rallying equities all point to pressure on the yellow metal.
In early Asian trade in Singapore, spot gold ruled at $1,392.97 an ounce, while gold futures maturing in June quoted at $1,391.50.
In the domestic market on Thursday, gold for jewellery (99.5% purity) slipped to Rs 26,430 for 10 gm and pure gold (99.9% purity) to Rs 26,570.
On MCX, gold June contracts could test Rs 26,000 and may derive support at Rs 25,900. August contracts could test Rs 26,250 and on the lower side could get support at Rs 26,100.
The rupee’s movement against the US dollar will also have a bearing on the yellow metal since a weaker rupee will make imports of commodities such as gold, crude oil and vegetable oils costlier.
Crude oil
Crude oil will likely cool a little more on higher supplies in the US and signs of slowdown continuing. Brent crude, in early Asian trade, ruled lower at $102.47 a barrel, while West Texas Intermediate (NYMEX) quoted at $94.19.
Oils and oilseeds
The oils and oilseeds complex could continue to gain on reports that China is encouraging imports. In fact, prices topped $15 a bushel in early Asian trade. But growers attempt to increase supply in the US pared gains.
Chicago Board of Trade (CBOT) soyabean for delivery in July was up at $15.04 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange gained at 2,370 ringgit ($781) a tonne.
Grains complex
The grains complex is seen ruling firm as Europe’s decision to allow over 135,000 tonnes of corn (industrial maize) from the US buoyed sentiments. In addition, demand for ethanol and lack of current crop stocks are pushing up nearby month contracts.
CBOT July corn contracts ruled steady at $6.59 a bushel in early trade.
Talks that China could be buying US wheat pushed up the grains price past $7 a bushel. Slow growth elsewhere capped gains. CBOT June wheat contracts were up at $7.02 a bushel.