Gold is likely to inch higher in the domestic spot and futures market on fears that jobless claims could have increased in the US.
If data show that jobless claims have increased, then it could delay the US’ plans of cutting down its programme of purchasing $85 billion bonds every month to prop up the economy.
At any cost, such a data can only hold gold at the current levels temporarily, unless data throw up anything alarming to show that the economy is still in a mess.
The reading of the situation emerging in gold is that it is headed lower, anyway. Only the pace of its drop remains a question. Analysts feel the July rally was an answer to April’s hammering and the precious metal is back resuming its journey south.
Most importantly, China has imported less of gold in July from Hong Kong, a far cry from the trends seen earlier. Investors cashing out of gold is another sign of the emerging bearishness.
Gold holdings in SDPR Trust
On SPDR Trust, world’s largest gold-backed exchange-traded fund, holdings in gold dropped to a little above 910 tonnes on Wednesday. In three days time, investors have sold of seven tonnes.
As regards the domestic market, the rupee’s movement against the dollar will also matter since a weaker rupee makes imports of gold, crude oil and vegetable oils costlier.
Spot gold, gold futures
In early Asian trade, spot gold ruled at $1,292.94 an ounce and gold futures maturing in December at $1,291.50.
In the domestic market on Wednesday, gold for jewellery (99.5 per cent purity) dropped to Rs 28,065 for 10 gm and pure gold (99.9 per cent purity) to Rs 28, 220.
On MCX, gold October contracts could swing between Rs 27,600 and Rs 27,750.
WTI, Brent crude
Crude oil is likely to trade in ranges caught between lower US stockpiles and higher supply. Data on US jobs also hold key to further direction.
Brent crude oil futures maturing in September were up at $107.64 a barrel and West Texas Intermediate for the month at $104.60 a barrel on NYMEX.
The oils and oilseeds complex could witness some recovery after China bought two lakh tonnes of soyabean from the US. Weather outlook showing parts of growing areas being dry has also raised some concerns.
Soyabean, crude palm oil
Chicago Board of Trade (CBOT) soyabean for delivery in November was up at $11.72 a bushel. Crude palm oil futures maturing in October opened lower at 2,210 ringgit or $679 a tonne.
The grains complex will head south with Iran and Egypt rejecting US wheat in favour Black Sea region grain. A record bearish bets on corn (industrial maize) does not augur well for the coarse grain.
CBOT corn for delivery in December dropped to $4.60 a bushel. Wheat for delivery in September ruled at $6.45 a bushel.
Natural rubber prices
Natural rubber in the spot market could be reined in by threat of imports in view of wide difference between domestic and global prices. However, futures could gain in line with the rise on Tokyo Commodity Exchange, where the yen’s retreat lifted the counter.
Rubber contracts maturing in January ruled at 255.2 yen or Rs 161.50 a tonne.