Gold prices are likely to be range-bound on Friday on the domestic spot and futures market as investors await crucial employment data from the US. Much will also depend on the rupee’s movement against the dollar.
The rupee looks like breaching the 57-level against the greenback.
If the data shows that job placement has increased, then gold could be in for some hammering. This is because more jobs means economic growth that could lead to the Federal Reserve reviewing its strategy of pumping more money into the economy.
Reports that at least 20 hedge funds have stopped investing in gold and that their holdings have dropped to around $22 billion from $32 billion at the beginning of year are indicators of the pressure on gold.
Gold prices
In early Asian trade, spot gold ruled firm at $1,415 an ounce, while gold futures maturing in August quoted at $1,414.50.
In the domestic market on Thursday, gold for jewellery (99.5 per cent) purity increased to Rs 27,570 for 10 gm and pure gold (99.9 per cent purity) to Rs 27,705.
Any rise in the dollar against the rupee could aggravate things since a weak Indian currency will make import of commodities such as gold, crude oil and vegetable oils costlier.
Crude oil
Crude oil will likely head up on speculation that the demand is set to rise on signs of economic revival.
July Brent crude contracts were up at $103.78 a barrel, while West Texas Intermediate crude contracts for the same month rose to $94.80.
Oils, oilseeds
Lower inventories of current crop and demand from China are set to drive the oils and oilseeds complex higher. In India, the oncoming festival season starting with Ramzan and approaching monsoon are all set to result in prices firming up.
Chicago Board of Trade (CBOT) soyabean for delivery in July was up at $15.30 a bushel, while crude palm oil August contracts on Bursa Malaysia Derivatives roe to 2445 ringgit ($792) a tonne.
Grains complex
The grains complex could search for a direction caught between Asia and other nations cancelling US wheat contracts and rising crude oil that could result in demand for alternative such as ethanol.
Lower corn (industrial maize) plantings is also lending support to the counter.
CBOT corn futures maturing in December quoted at $5.47 a bushel, while July contracts ruled at $6.96 a bushel.
Natural rubber
Natural rubber could head lower with the Japanese yen strengthening. However, rising crude oil could cushion the fall.
On the Tokyo Commodity Exchange, rubber for delivery in November slipped to 243.6 yen or Rs 142.25 a kg.