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Gold is likely to rule flat to lower on Thursday in the domestic market as the yellow metals searches for a direction on the heels of uncertainty over US budget talks.
The dollar continues to be kept pinned by other currencies and Thursday morning saw the yen gaining marginally.
With the dollar looking down and euro ruling firm, the Indian rupee could edge higher. Thus, a higher rupee that makes imports of key commodities such as gold, crude oil and vegetable oils, will make shipments of these into the country cheaper.
However, bargain hunting is likely to emerge after gold plunged by Rs 635 for 10 gm on Wednesday in the Mumbai bullion market.
In early trade in Singapore, gold was up a tad at $1,668.47 an ounce, while gold futures for delivery in February ruled at $1,669.70.
In the domestic market on Wednesday, gold for jewellery (99.5 purity) plunged to Rs 30,540 for 10 gm, while pure gold (99.9 purity) plummeted to Rs 30,670.
The oils and oilseeds counter is likely to come under pressure again on Thursday as soyabean contracts continued to dip on the Chicago Board of Trade. The cancellation of Chinese purchase over weighs in the market over an estimate that pegs soyabean production lower. Adding to the bearish trend is the higher inventories of ethanol that dragged corn (industrial maize) in its course and palm oil in Malaysia and Indonesia.
On CBOT, soyabean for delivery in January slid to $14.37 a bushel. Crude palm oil futures for delivery in March on Bursa Malaysia Derivatives Exchange was quoted down at 2,330 ringgit ($763) a tonne on Wednesday.
A rising rupee could put pressure on grains counter, especially wheat and corn even as soyabean’s bearish run is likely to aggravate it.
On CBOT, wheat for delivery in March fell to $8.0575 a bushel, while corn for delivery in the same month ended lower at $7.03 a bushel.
A lower inventory in the US saw the crude oil counter on the New York Mercantile Exchange (NYMEX) top $90 a barrel for the January contracts. It finally settled at $89.51 a barrel, while Brent crude contracts for the same month were up at $110.36 a barrel.
Expect natural rubber to gain as its alternative synthetic rubber, derived from crude oil products, is likely to rule higher.
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