Gold prices in the domestic spot and futures market are likely to be range-bound on Tuesday as the market grapples with mixed signals from senior officials of US Federal Reserve on pruning the stimulus programme.
A rising stock market, on the other hand, is exerting pressure on the yellow metal but a weak dollar cushioned the price fall.
James Bullard, St. Louis Federal Reserve President, and Jerome Powell, US Federal Board Government, called for measures to slow down plans to cut the $85 billion-a-month bond purchase programme to help the economy recover.
Bullard said signals should be clear on economic recovery and Powell said the process to cut the stimulus need not be rushed through.
However, Richard Fisher, President of Federal Reserve Bank of Dollar, said he would not rule out tapering of the stimulus programme.
Gold holdings in SPDR Trust
The other bearish signal in the market is the drop in gold that is held in electronic form in exchange-traded funds. Gold holdings in SPDR Trust, world’s biggest exchange-traded fund, fell to 866.32 tonnes.
In early Asian trade, gold tended to gain as stocks fell.
Spot gold, gold futures
Spot gold in Singapore was quoted at $1,318.05 an ounce and gold futures contract maturing in December at $1,317.80.
During Muhurat trading on Sunday in Mumbai, gold for jewellery (99.5 per cent purity) gained marginally to Rs 30,400 for 10 gm and pure gold (99.9 per cent purity) to Rs 30,550. On MCX, gold December contracts could continue trading below Rs 30,000.
Brent crude
Speculation that crude oil stocks in the US increased for the seventh consecutive week could continue to put pressure on Brent crude. Brent crude for delivery in December dropped to $106.30 a barrel and US crude to $94.64.
The oils and oilseeds complex could head north as the US is witnessing huge demand for its soyabean. The US Department of Agriculture said it inspected 80.6 million bushel for exports, up by a third compared with last year.
The USDA could throw up figures that the harvest of soyabean is nearing completing, thus easing the pressure that harvest was casting on the prices. The only hope for bears is rains in Argentina improving the outlook for better soyabean sowing.
On Chicago Board of Trade, soyabean contracts maturing in January ruled at $12.59 a bushel. Bursa Malaysia Derivatives Exchange is closed for Awal Muharram.
Wheat, corn prices
The grain complex will head south with corn prices dropping to over three-year low on record US crop and huge inventories.
Wheat, on the other hand, dropped on lower exports from the US despite Tunisia and Saudi Arabia buying huge quantities of the eight lakh tonnes sold by it. Rains in Argentina during the week-end are seen favouring the wheat crop there, adding to the pressure.
CBOT wheat for delivery in December fell to $6.62 a bushel and corn for delivery the same month to $4.25 a bushel.