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Gold prices on domestic and futures market are likely to rule flat on Tuesday as the market looks for direction from a key meeting of the US Federal Reserve. But investors continue to be bearish, further paring their holdings in electronic formats on gold exchange-traded funds.
The US Federal Reserve meets on Tuesday with speculation rife of an imminent paring of pumping cash into the economy. The US Fed buys treasury and other bonds worth $85 billion every month. The speculation has already resulted in the dollar gaining. The movement of the rupee against the Greenback will also have a say on how gold behaves since a weak rupee results in commodities such as gold, crude oil and vegetable oils turning costlier.
In early Asian trade in Singapore, spot gold ruled at $1,384.72 an ounce, while gold futures maturing in August quoted at $1,384.
In the domestic market on Monday, gold for jewellery (99.5% purity) slipped to Rs 27,840 for 10 gm and pure gold (99.9% purity) to Rs 27, 985.
On MCX, gold August contracts could range between Rs 27,800 and Rs 27,900.
Meanwhile, holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, dropped to 1,003.17 tonnes on Monday, the lowest in 52 months.
Crude Oil
Fears that stockpiles in the US could be lower are likely to drive crude oil up in almost all markets on Tuesday.
It was reflected in early Asian trade where Brent crude for delivery in August was up at $105.59 a barrel, while Western Texas Intermediate crude July contracts rose to $97.84 a barrel.
Oils and Oilseeds
The oils and oilseeds complex will head lower despite Malaysia reporting higher exports. This is because the weather in the US is conducive to planting more soyabean, while Indian monsoon’s progress is seen positive for soyabean and other oilseeds.
Chicago Board of Trade soyabean for delivery in November quoted at $12.90 a bushel, while crude palm oil in Bursa Malaysia Derivatives Exchange to be delivered in August rose to 2,475 ringgit ($784.5) a tonne in early trade.
Grains complex
Though wheat and corn (industrial maize) slipped last night on favourable weather for the US crop, in early trade CBOT wheat for delivery in September rose to $6.85 a bushel, while corn for delivery in December quoted at $5.40 a bushel.
Rubber
With Thailand, Indonesia and Malaysia, the top three rubber producing nations, not able to decide on curbing exports, rubber is headed lower on fears of supply glut.
On the Tokyo Commodity Exchange, rubber for delivery in November fell to 235 yen or Rs 144 a kg.
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