Gold prices on the domestic spot and futures markets are likely to trade in ranges as the market weighs US moves to cut its stimulus package against rising Asian demand and plunging rupee.
Reports from Indonesia said it may import more gold this year, while demand in China continues to be strong. India’s imports in August are likely to be lower but could pick up next month ahead of the festival season during which buying is considered auspicious.
The impending kharif harvest beginning September-end is another factor for consideration, especially since monsoon has showed excess but beneficial rains across the country.
The Agriculture Ministry is banking on a record kharif (summer crop) production, while prospects for rabi (winter crop) are also good given the favourable soil moisture.
All these are indications that the market will be volatile with various factors coming in to play at different stages.
The tug-of-war in the market is also seeing holdings in exchange-traded funds unchanged. Holdings in SPDR Trust, world’s largest gold exchange-trade fund, were static at 913.52 tonnes.
Spot gold, gold futures
In early Asian trade, spot gold was up at $1,376.96 an ounce and gold futures maturing in December at $1,376.50.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) slipped to Rs 31,375 for 10 gm and pure gold (99.9 per cent) to Rs 31,530.
MCX October gold futures are likely to trade between Rs 31,000 and Rs 31,250.
Crude oil prices
Crude oil is likely to heat up on US data that showed fewer workers seeking unemployment benefits last month. This is the lowest in the last five years, giving rise to optimism of economic recovery and, in turn, demand for crude oil.
Brent crude contracts maturing in October rose to $110.29 a barrel and West Texas Intermediate crude for the same month to 105.14.
Oils, oilseeds
The oils and oilseeds complex could seen some tempering down of the heat generated this week. This basically stems from the outlook for US soyabean and Indian oilseeds.
Though there were initial fears that soyabean could be affected by dry weather, rains last evening in key growing areas of US gave strength to the bears. Lower-t-an expected exports from the US are also putting pressure.
Chicago Board of Trade soyabean contracts set to be delivered in November ruled at $12.97 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil for November contract opened lower at 2,344 ringgit or $708 a tonne.
Grains complex
The grains complex is also set to witness some bearish action after corn (industrial maize) gave up its gains of Thursday morning following rains in US Mid-west. The rains are seen as beneficial to the standing crop.
Concerns over dry weather are also waning as experts say it would actually speed up the plants maturity. Besides, exports are lower compared with last year.
Corn, wheat prices
CBOT corn for delivery in December quoted at $4.67 a bushel. Wheat for the same month ruled at $6.41 a bushel.
Natural rubber could gain, primarily since it has fallen too sharply too quickly. There could be some value buying too in the domestic market. Various data on economy showing rebound in growth could also propel the industrial commodity higher.
On the Tokyo Commodity Exchange, January rubber contracts rose as the yen weakened. The January contract was up at 271.2 yen or Rs 176 a kg.