Gold prices in the domestic spot and futures market are likely to trade sideways on Wednesday as the global market weighs the impact of mixed economic data from the US.
On Tuesday, data showed that the growth in the US services industries was faster than general expectation. That had bets rising on the US Federal Reserve ending its $85-billion-a-month stimulus programme sooner than expected.
The general view now is that gold could slip towards $1,300 an ounce unless a clear signal emerges on the stimulus programme continuing. The market is likely to get further cues on Friday when the weekly US jobs data will be released.
Gold holdings in SPDR Trust, world’s biggest gold exchange-trade fund, remained unchanged at 866.32 tonnes.
In India, demand could see some tapering, now that the festivals are over. Though wedding season buying could continue, buyers could be looking for a fall in prices.
Buying in rural areas will have to be monitored following reports of damage to crops due to rains, though arrivals are set to peak, leaving families engaged in farming with dispensable cash.
The premium for gold, following tight supplies in the wake of RBI norms that 20 per cent of each imported consignment has to be re-exported, has begun to ease.
Spot gold, gold futures
In early Asian trade, spot gold ruled at $1,312.11an ounce. Gold futures maturing in December quoted at $1,311.70. The domestic market was closed on Tuesday.
On MCX and NCDEX, gold December contracts are likely to continue trading below Rs 30,000.
Crude oil prices
Crude oil will continue to be under pressure on speculation that stockpiles in the US increased for the seventh consecutive month. With Libya set to scale up production, the supply side worries seem to be getting over.
Brent crude for delivery in December was down at $105.95 a barrel and US crude at $93.91.
The oils and oilseeds complex could face pressure on hopes that the US Department of Agriculture will come out with a data showing better yield in soyabean. In addition, concerns over South America crop have eased; though planting in Argentina is still low.
Soyabean, crude palm oil
Chicago Board of Trade soyabean contracts to be delivered in January dropped to $12.52 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange opened lower at 2,570 ringgit or $807 a tonne.
The grains complex is set to come under further pressure on expectations that the US data will show higher production and yield in corn (industrial maize).
Wheat, corn futures
While US yield is reported to be higher, the carryover stocks are now expected to be far higher. Wheat, on the other hand, is increasingly under pressure with last month’s rally being seen as over done.
CBOT wheat contracts for delivery in December fell to $6.57 a bushel. Corn contracts for the same month ruled at $4.24 a bushel.