Gold is likely to rule firm in the spot and futures market on Friday as the yellow metal gained overnight in the markets abroad.
The gains followed US data that showed there were higher jobless claims last week. This, the market feels, will result in the US continuing its $85-billion a month stimulus package.
But there are other signs that the base metals market has taken into consideration to drive up copper which could begin to tell on gold soon. US manufacturing data turned out to be better than what analysts expected and demand for products increased 4.2 per cent.
Therefore, any sharp gain in the yellow metal is likely to be reined in by this factor. The news of Russia and Kazakhstan increasing their bullion holding and China likely to import 1,000 tonnes of gold are also driving the market.
But how much these are crucial is anyone’s guess since gold holdings in exchange-traded funds continue to fall. On Thursday, holdings in SPDR Trust, world’s largest, dropped to 927.36 tonnes.
This also shows that investors are using every rise in the precious metal to cash out.
Spot gold, gold futures
In early Asian trade on Friday, spot gold in Singapore ruled higher at $1,338.59 an ounce and gold futures maturing in December at $1,338.90.
In Mumbai, gold for jewellery (99.5 per cent purity) closed lower at Rs 27,505 for 10 gm and pure gold (99.9 per cent purity) at Rs 27,645.
On MCX, gold October contracts could rise to Rs 27, 300.
Crude oil
Higher crude production in the US is countering the drop in stockpiles and this could result in crude prices dropping.
In early trade, Brent crude futures maturing in September ruled at $107.74 a barrel and West Texas Intermediate for the same month at $105.54.
The oils and oilseeds complex could perhaps see spot traders keeping away from the market as prices are set to drop further. This follows panic sales by US soya farmers since demand had dropped and they are left holding their produce and prospects for the new crop are good.
Soyabean, crude palm oil
On Chicago Board of Trade, soyabean November futures dropped to $12.18 a bushel. Crude palm oil October futures on Bursa Malaysia Derivatives Exchange, having slipped below 2,200 ringgit, ruled at 2,171 ringgit or $678 a tonne.
Corn (industrial maize) and wheat are also set to trend lower as the weather outlook in the US for a record crop in favourable.
CBOT corn futures maturing in December fell to $4.78 a bushel and wheat futures maturing in September slipped to $6.49 a bushel.