Gold prices in the domestic spot and futures market are likely to rule firm on Monday as the market looks for direction.
Rising stock markets could curb investors’ interest in the yellow metal even as they weigh how long the US can avoid paring its $85-billion-a-month stimulus programme.
A majority of analysts now feel that the paring could begin from March. Some clue should be available during mid-week when the US Fed will be releasing the minutes of its October 29-30 meeting.
Cutting of bullish bets by money managers and hedge funds, for the third consecutive week, could have a bearish effect on the bullion.
Data on euro zone trade, US net capital flows and NHB housing index could provide further cues for gold later in the day.
Rupee Vs dollar
In India, the movement of the yellow metal could hinge on currency movement as any drop in the rupee against the dollar will make imports of gold, crude oil and vegetable oils costlier.
In early Asian trade, spot gold slipped to $1,286.36 an ounce and gold futures maturing in December at $1,285.60.
In the domestic market on Saturday, gold for jewellery (99.5 per cent purity) slipped to Rs 31,125 for 10 gm and pure gold to Rs 31,275.
On MCX and NCDEX, gold could head lower towards Rs 30,000 for contracts maturing in December.
Brent crude
With data showing that Saudi Arabia exported more crude oil, Brent crude prices are likely to come under pressure. Exports in September were the highest since November 2005, data showed.
Brent crude ruled at $108.24 a barrel for contracts maturing in January, while US crude contracts maturing in December quoted at $93.59.
The oils and oilseeds market could also search for direction as it weighs higher crushing of soyabean in the US against lower export sales.
Besides, the US Environment Agency’s move to cut the use of bio-fuel could put further pressure. Rains in South America, especially Brazil, are seen favourable for soyabean crop, adding to further bearishness.
Soyabean, crude palm oil
On Chicago Board of Trade, soyabean for delivery in January ruled at $12.81 a bushel. Crude palm oil for delivery in January slipped to 2,586 ringgit or $809 a tonne.
Wheat, corn futures
Wheat and corn (industrial maize) are also set to head south. Corn is under pressure on fears that its use for bio-fuel could drop even as record production is on cards.
Wheat faces heat from lower US exports and India’s presence in the export market at a competitive price.
Corn contracts maturing in March slipped to $4.28 a bushel and wheat contracts for the same month ruled at $6.58 a bushel.