Gold prices are likely to trade firm even as the yellow metal looked for direction in the global market. Easing demand is preventing it from gain further on concerns over continuing slow economic growth. The dollar’s low profile against a basket of currencies is also playing a role in the precious metal trading within a narrow range.
In Singapore, gold gave up its overnight shed some of its gleam and traded at $1,679.80 an ounce. Gold futures for delivery in February traded at $1,680.20.
In the domestic market on Wednesday, gold for jewellery (99.5% purity) gained Rs 100 at Rs 30,640 for 10 gm, while pure gold (99.9% purity) closed higher at Rs 30,780.
The oils and oilseeds complex is likely to continue its ally as dry weather in South America, especially Brazil, is causing concern. Malaysia and Indonesia’s decision to allow palm oil exports at zero tax is another booster for the complex despite stocks being at record high.
Overnight on the Chicago Board of Trade, soyabean for delivery in March closed higher at $14.39 a bushel, while on Wednesday evening crude palm oil futures on Bursa Malaysia Derivatives Exchange finished higher at 2,428 ringgit ($804) a tonne.
Corn (industrial maize) will also rise as US stocks are at a nine-year low. On CBOT, corn March contracts closed up at $7.31 a bushel.
Wheat is also set to gain in sympathy after rising to $7.85 a bushel on CBOT for delivery in March.
Crude oil will also likely trade higher as US stockpiles showed a drop and consumption of petroleum products increased. US is the largest consumer of crude oil.
Brent February contracts were up at $110.61 a barrel, while NYMEX crude for delivery in February closed higher at $94.08 a barrel.
This could see natural rubber rule higher since its alternative synthetic rubber derived from crude oil will quote higher.