Gold prices in the domestic market are likely to make further headway on cues from the global market that rallied on the tensions in West Asia and signs that there was progress to avoid US budget crisis.
Crude oil and natural rubber are also set to gain as Brent crude topped $110 a barrel overnight on concerns over supplies following the Israel-Palestine standoff.
The dollar was up against a basket of currencies in early trade and this could add to the bullish trend. Any rise in the dollar will make imports of gold and edible oil into the country costlier. Gold and vegetable oils are amongst commodities on whose imports India relies to meet its burgeoning demand.
In early trade gold was quoted at $1,731.26 an ounce after having gained over $18 overnight. Gold futures for December delivery ruled at $1,731.80.
In Mumbai, where the market was closed on Monday, gold for jewellery (99.5 purity) had finished higher at Rs 31,635 for 10 gm on Saturday, while pure gold (99.9 purity) was up at Rs 31,765 during the weekend.
The oils and oilseed complex is likely to gain from the dollar’s rise as well as surging crude. A rebound on technical correction overnight on the Chicago Board of Trade will aid the trend.
Soyabean for January delivery ended higher at $13.95-3/4 a bushel, while crude palm on Bursa Malaysia Derivatives Exchange, on Monday, ended higher at 2,459 ringgit ($804) a tonne.
Corn (industrial maize) and wheat are set to gain on demand for exports and the rupee’s decline that will make exports competitive. Overnight, corn for December delivery increased to $7.38-1/2 and wheat for delivery the same month rose to $8.42 a bushel.
The West Asia tension saw Brent crude January contracts surge to $111.33 a barrel, while NYMEX crude for January delivery soared to $89.28.
In fact, in view of a firm crude oil could see most of the commodities gain on Tuesday.