Domestic spot gold prices are set to top Rs 32,000 for 10 gm as the global market has turned firm on expectations of the US Federal Reserve delaying its plan to prune the economy-boosting stimulus programme.
Though the weekly US jobs data showed that the number of jobless claim fell during the week ended October 19, the numbers were lower than expected by the market.
Also, the market is of the view that US growth has been affected by the shutdown earlier this month and this could further delay any plans to cut the $85-billion-a-month programme to boost the economy.
Analysts also see technical buying behind the rise with the open interest in US futures rising, ruling out short-covering for the current surge.
However, gold holdings in exchange-traded funds dropped with the SPDR Trust, world’s biggest gold exchange-traded fund, reporting that holdings fell to 876.52 tonnes.
By mid-day in Asia, spot gold quoted at $1,344.33 an ounce and gold futures for delivery in December at $1,344.20.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) ended higher at Rs 31,783 and pure gold (99.9 per cent) purity at Rs 31,935. On MCX, gold for delivery in December could try to scale Rs 31,500.
Crude stockpiles
US crude stockpiles are causing concern in the market and the prices could continue to be under pressure.
Brent crude contracts maturing in December slipped to $107.24 a barrel and US crude to $97.33.
Range-bound trading
The oils and oilseeds complex is likely to be range-bound with the market caught between harvests in US and India gathering pace and Russia springing a surprise by buying 120,000 tonnes.
Brazil is reported to have problems with shipping, while Argentina does not seem to be in the market, leaving the space open for US beans.
In India, arrivals could face problems again as a low pressure area is headed towards the soyabean growing areas in Madhya Pradesh and Maharashtra.
Chicago Board of Trade soyabean contracts maturing in January ruled at $13.05 a bushel in Asia. Crude palm oil opened lower at 2,451 ringgit or $777 a tonne on the Bursa Malaysia Derivatives Exchange.
Uncertainty over wheat crop
Uncertainty over the Australian wheat crop due to frost effect in New South Wales and Victoria cancelled out the bearish effect of India trying to sell the grain in the global market. AWB also reported problems in harvest, turning the outlook bullish.
The uptrend in wheat could rub on corn (industrial maize) too since it is selling a huge discount of over $2.5 a bushel, making it more attractive for feed.
CBOT wheat for delivery in December quoted at $6.98 a bushel and corn for delivery the same month at $4.40 a bushel.