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Gold prices are likely to rule sideways on the domestic spot and futures market as the market weighs the effect of the US Government slowdown that look like prolonging for another week.
Overnight, data showed that the US service industry grew, albeit at a pace slower than expected, and the dollar ruled at an eight-month low.
Gold holdings in SPDR Trust
On the other side, holdings of gold in exchange-trade funds continue to drop. Gold holdings in SPDR Trust, the world’s biggest, dropped below 900 tonnes to 899.99 tonnes.
In India, the rupee’s movement will also determine gold’s direction as a stronger Indian currency against the dollar makes import of gold, crude oil and vegetable oils cheaper.
Spot gold, gold futures
In early Asian trade, spot gold in Singapore ruled lower at $1,315.28 an ounce, while gold futures expiring in December slipped to $1,315.60.
In the domestic market, gold for jewellery (99.5 per cent purity) ended a tad lower at Rs 29,545 for 10 gm and pure gold (9.99 per cent purity) at Rs 29,690.
On MCX, gold December futures could rule between Rs 28,900 and Rs 29,100.
Crude oil set to fall
Crude oil is set to rule lower as the US shutdown prolongs, giving rise to fears that it could slow the economy and hurt demand.
Brent crude contract maturing in December ruled at $108.90 a barrel and West Texas Intermediate for the same month at $103.21.
The oils and oilseeds complex could gain as rains in the US Midwest have slowed harvest. Immediate supplies have tightened, while demand for soyameal is on the rise.
Soyabean, crude palm oil
On Chicago Board of Trade, soyabean December contracts were up at $12.83 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil December futures opened higher at 2,304 ringgit or $722 a tonne.
Wheat prices could continue to rule firm on Chinese demand and the UN’s Food and Agricultural Organisation downgrading the production outlook. Wheat crop is facing problems in Argentina and Russia.
Corn, wheat futures
Corn (industrial maize) is likely to gain in tandem.
CBOT wheat for delivery in December ruled firm at $6.88 a bushel and corn for the same month at $4.39 a bushel.
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