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Gold may gain in the domestic market on Monday with the yellow metal having lost too much in too little time last week. Also, the dollar gained in early Asian currency market against a basket of currencies. Thus, it could look up against the rupee too.
Still, gold’s movement for the day will hinge on the rupee’s direction. This is because any drop in the value of the rupee can make imports costly. India imports gold to meet its demand.
The other factor that could roll out in favour of the precious metal is that speculators are betting on it to gain in the long-term and have increased their exposure. Holdings in exchange-traded funds that are backed by gold are also at a record high.
This follows concerns over the US fiscal deficit. Talks are on to solve it but scepticism prevails.
In early trade, gold was up marginally at $1,716.81 an ounce, while gold for December delivery quoted at $1,717.10.
On Saturday, gold for jewellery (99.5 purity) plunged to Rs 31,275, while pure gold (99.9 purity) slid to Rs 31,430.
Oils, oilseeds
The oils and oilseeds complex is likely to be under pressure, mainly in view of record stocks in Malaysia. Gloomy demand outlook is also likely to keep up the pressure.
On Chicago Board of Trade (CBOT), soyabean for January delivery closed the week-end lower at $14.31 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil for February contract slid to 2,370 a ringgit or $780 a tonne.
Experts such as Godrej International’s Dorab Mistry see palm oil dropping to 2,200 ringgits.
Rally in grains complex
The rally in the grains complex seen last week could be clipped on Monday for two reasons. One, speculators could lock-in their profits. Two, export demand from buyers for wheat following poor production in Argentina and Black Sea Region is yet to be realised.
Wheat on CBOT for December delivery was down during the week-end at $8.46 a bushel, while corn (industrial maize) slid to $7.50 for delivery the same month.
The US fiscal concerns have led to an outlook that is not promising for crude oil demand. And the truce between Hamas and Israel in Gaza has ended supply fears. These factors are seen bearish for crude oil.
In early trade, Brent crude for December delivery quoted at $111.02 a barrel, while NYMEX ruled at $88.93.
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