Gold prices in the domestic market are likely to be range-bound with a bias towards the lower side as the dollar is under pressure awaiting a solution to the US fiscal crisis. Investors are eagerly awaiting an outcome to the crisis. The gold continues to rule below $1,700 an ounce in the global market.
Though the dollar gained in early Asia trade against the yen after Shinto Abe led the Liberal Democratic Party in Japan to a thumping victory, it was still down against other currencies, particularly the euro. Shinto Abe has promised easy monetary policy that could see Japan pumping more money into the economy.
In early trade, spot gold ruled flat at $1,695.01 an ounce, while gold futures were quoted at $1,696.40.
In the domestic market, gold for jewellery (99.5 purity) eased to Rs 30,925 for 10 gm on Saturday, while, pure gold (99.9 purity) was up marginally at Rs 31,065.
The rupee could gain going by the global forex market trend and this could mean imports of commodities such as gold can turn cheaper. India imports gold, edible oils and crude oils, the top three commodities on which forex outgo is higher, to meet its rising demand.
Promising export and domestic orders lifted soyabean on the Chicago Board of Trade (CBOT) during the weekend but reports of higher production in the US could soon dampen sentiments. A higher inventory of palm oil in Malaysia is also likely to deter prices from rising.
During the weekend, soyabean for delivery in January increased to $14.96 a bushel on the CBOT, while crude palm oil on Bursa Malaysia Derivatives finished up at 2,276 ringgit ($746) a tonne.
Wheat and corn (industrial maize) are likely to be range-bound as the weekend gains could come under pressure from the forex market. On CBOT, wheat for delivery in March rose to $8.14 a bushel, while corn for delivery the same month was up at $7.30 a bushel.
Crude oil is likely to gain after data from the US and China showing growth in economy perked up prices. During the weekend, Brent crude, the benchmark for India, for delivery in January increased to $109.15 a barrel.
NYMEX crude for January delivery advanced to $86.73 a barrel.
This could see natural rubber gain as prices of its alternative synthetic rubber, produced from crude oil derivatives, will gain.