Gold is likely to trade range-bound in the domestic spot and futures market as hopes on US Congress reaching a pact to avoid payment default brighten.
The optimism has resulted in the dollar gaining and gold losing its haven appeal.
However, in the Indian context a rise in the dollar would mean import of gold, crude oil and vegetable oils, the three most important commodities in the import basket, will turn dearer.
A plan mooted by the Republicans to raise the debt limit has not got any response from US President Barack Obama with Congressmen agreeing to continue negotiations.
The hike in debt limit could also see the US putting off its programme to prune its $85-a-billion bond-buying programme.
Spot gold, gold futures
In early Asian trade, spot gold in Singapore ruled lower at $1,290.75 an ounce and gold futures maturing in December at $1,291.20.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) dropped to Rs 30,215 for 10 gm and pure gold (99.9 per cent purity) to Rs 30,365.
On MCX, Gold December contracts are likely to trade between Rs 29,000 and Rs 30,000.
Meanwhile, gold holdings in world’s biggest exchange-trade fund, SPDR Trust, are down to 896.38 tonnes.
Brent, WTI crude
Crude oil will also trade sideways as talks to end the US Government shutdown gather momentum. On the other hand, Brent’s premium over West Texas Intermediate is likely to stay higher after the arrest of the Libyan Prime Minister.
Brent crude contracts maturing in November ruled at $111.59 a barrel and WTI at $102.76.
Soyabean, crude palm oil
The oils and oilseeds complex could continue to rule hot as Malaysian palm oil stocks have been estimated lower than the market projections. Besides, in the Indian context a lower soyabean harvest is pushing up prices. On the Chicago Board of Trade, short-covering saw soyabean oil gain overnight.
CBOT soyabean November contracts were quoted at $12.85 a bushel in early Asian trade. On Bursa Malaysia Derivatives Exchange, crude palm oil December futures slipped at the opening to 2,379 ringgit or $747 a tonne.
Corn, wheat futures
In the grains complex, corn (industrial maize) could fall as harvest in the US peaks and on reports that the US Environment Agency is toying with the idea of cutting down the mandatory ethanol blending programme.
On the other hand, wheat could be range-bound on Brazil and China scouting for more purchases and Egypt pulling out of the import market complaining that prices are too high.
CBOT corn for delivery in December quoted at $4.35 a bushel and wheat for delivery in the same month at $6.83 a bushel.