Gold prices in the domestic spot and futures market are likely to trade range-bound with an upward bias, looking for clues if the US will put off its plan to cut its $85 billion-a-month stimulus programme.
Though US lawmakers have ended the Government shutdown with a debt deal, fears that US funding could run into problem are gripping the market. This is keeping gold well above $1,300 an ounce.
The market is now looking for clear signals from the US to end its fiscal problems. The current deal helps US to continue funding till January 15, while the borrowing authority can carry on its functions till February 7.
In India, gold will continue to command a premium at least until Diwali gets over next week. A clear signal on the demand front should be available on October 24, when Dhanteras will be observed.
Currently, gold is ruling at a Rs 2,000/10 gm premium as imports continue to be hampered by the RBI’s stipulation that 20 per cent of every consignment of the yellow metal brought into the country should be exported.
Spot gold, gold futures
In early Asian trade at Singapore, gold was up at $1,318.80 an ounce and gold futures maturing in December at $1,318.30.
In the domestic market on Saturday, gold for jewellery (99.5 per cent purity) closed up a tad lower at Rs 30,965 for 10 gm and pure gold (99.9 per cent purity) at Rs 31,115.
On MCX, gold December contracts may try to regain levels of Rs 30,000.
US crude stockpiles
Crude oil is likely to swing either way until it gets clear signals on US stockpiles and demand with fears over geo-political crisis receding.
Brent crude for delivery in November ruled at $110.07 a barrel and US crude for delivery the same month at $100.86.
Rains in Brazil that will boost the plantings and a dry weather in the US that will help harvest are likely to put pressure on the oils and oilseeds complex.
Rising Indian kharif or summer oilseeds harvest will also have an effect, though Chinese imports are a factor that turn things differently.
Soyabean, crude palm oil
In early Asian trade, Chicago Board of Trade (CBOT) soyabean slipped to $12.89 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange to be delivery in January opened higher at 2,433 ringgit or $768 an ounce.
Corn, wheat prices
On the other hand, rains hampering wheat harvest in Brazil, a small wheat crop in Argentina, and weather also affecting Ukraine wheat, leading to gains for US wheat, will likely help wheat head north.
In fact, it has begun ruling above key $7 a bushel-mark. Since corn is at a heavy discount to wheat, it is also likely to gain. But for now, a higher US production is dragging prices.
CBOT wheat for delivery in December slipped to $4.40 a bushel, while wheat contracts maturing in December rose to $7.08 a bushel.