Commodities, in general, are likely to increase across-the-board as the global market made overnight gains in the wake of a drop in dollar and bargain hunting by investors.
Gold could snap a two-day fall as the dollar has dropped against the euro. This could help rupee gain and lead to rise in the yellow metal’s prices in the domestic market. Any rise in the value of the rupee will make its imports cheaper. Festival demand and an oncoming marriage season are likely to boost buying.
Spot gold opened higher by $ 5 in Singapore at $ 1,741.30 an ounce from overnight close in New York. US COMEX gold futures for December delivery settled up $ 8.70 an ounce at $ 1,746.30.
Gold (99.5 purity), used in jewellery, dropped to Rs 30,800 for 10gm on Tuesday. Pure gold (99.9 purity) slid to Rs 30,945.
Oils and oilseeds could gain as bargain hunting emerged in soyabean that continued to quote below $ 15 a bushel. Crude palm oil in Malaysia closed lower on Tuesday at 2,466 ringgit ($ 808) a tonne.
If the volatility seen in the last couple of session prolongs, then it could see a lower volume in the domestic market.
Overnight on the Chicago Board of Trade (CBOT), soyabean for November delivery closed at $ 14.93-3/4 a bushel.
Corn for December delivery increased to 7.38-1/4 a bushel, while wheat was up on CBOT for December at $ 8.47 a bushel.
This could see a mixed trend in the domestic market with industrial maize gaining, while wheat maybe range-bound.
Crude oil could also gain with Brent for November ending higher above $ 115 a barrel, while NYMEX crude closing up at $ 92.40 a barrel.
In turn, natural rubber prices in spot and futures market are likely to benefit.
Sugar prices close higher on ICE US futures market at 20.17 cents a pound. White sugar for December delivery in London ended higher at $ 557.90 a tonne. These factors and buying for festival are likely to boost sugar.