Despite China showing appetite to buy more, gold prices in the domestic spot and futures are likely to be on leash as concerns over US tapering of its stimulus programme weigh heavily on the market.
On Thursday, the volume in gold trade on Shanghai exchange rose to a month-and-a-half high. But that failed to lift the gold prices with US data showing claims for unemployment fell.
Economic recovery
The US seems to be showing definite signs of economic recovery, prompting higher bets on the US Federal reserve cutting its $85 billion a month plan to boost the economy.
There could further indications of how the global economy is faring with Europe releasing its data on inflation and unemployment later in the day. Germany's retail data and France data on producer prices will have a minor role to play in the bullion market.
Bearish trend
Further gloom for the precious metal is the report of a majority of analysts forecasting a bearish trend ahead for gold.
Currency moves may have some impact as any weakening of the rupee against the dollar makes import of gold, crude oil and vegetable oil costly.
Spot gold, gold futures
By mid-day in Asia, spot gold quoted at $1,242.93 an ounce and gold contracts maturing for delivery in February at $1,242.30.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) fell to Rs 30,435 and pure gold (99.9 per cent purity) to Rs 30,50.
On MCX and NCDEX, gold futures could continue to trade below Rs 30,000.
Crude oil supplies
Higher supplies from the Organisation of Petroleum Exporting Countries and rising stockpiles in the US are likely to expert pressure on crude oil.
Brent crude contracts maturing for delivery in January dropped to $110.82 a barrel and US crude for the same month to $92.29.
The oils and oilseeds market seems to have digested the report of drop in Indonesia production for the first time in 15 years.
Prices may remain range-bound
Prices are expected to be range-bound with markets in the US closed for Thanksgiving Day. The prospect of higher soyabean production, especially with the weather outlook brightening in South America, is likely to dampen the bulls.
Chicago Board of Trade soyabean contracts for delivery in January ruled at $13.20 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing for delivery in February slipped to 2,654 ringgit or $821 a tonne.
Problems with wheat in Argentina, prospects of cold weather affecting the crop in the US and the International Grains Council forecasting a low carryover stocks are likely to help the cereal gain. Corn (industrial maize) could rise in sympathy.
CBOT wheat for delivery in March quoted at $6.63 a bushel and corn contracts for the same month at $4.26 a bushel.