Gold will likely gain on Tuesday as its prices in the global market gained overnight on hopes that the crisis over US Budget will blow over. Moreover, the market brimmed with optimism that central banks in various countries will undertake measures to spur economic growth.

In addition, the dollar against rose against currencies such as euro that could render the yellow metal costlier in India.

India depends on imports of commodities such as gold, crude oil and vegetable oil to meets its rising demand.

Overnight, gold futures that expire in February closed at $1,675.80 an ounce, while spot gold quoted at $1,676.20.

In the domestic market, gold for jewellery (99.5%) end higher at Rs 30,490 for 10 gm on Monday, while pure gold (99.9% purity) closed at Rs 30,625.

The Asian market was closed for New Year on Tuesday.

The oils and oilseeds market could come under pressure with prices of soyabean dropping overnight on the Chicago Board of Trade (CBOT). Crude palm oil on Bursa Malaysia Derivatives Exchange, too, dropped.

On CBOT, soyabean for delivery in March ended down at $14.09 a bushel, while crude palm oil slipped to 2,430 MYR ($797.25) a tonne.

The grain complex will likely be mixed on cues from CBOT as wheat slid on reports that farmers sold their stocks on fears that the US Budget row will dampen economy.

On CBOT, wheat for delivery in March slipped to $7.78 a bushel, while corn (industrial maize) for delivery the same month was up at $6.98.

Crude oil could gain on hopes of a solution to the US Budget talks. Brent crude for delivery in February was up at $111.11 a barrel, while NYMEX crude ended higher at $91.82.

This could see natural rubber gain as synthetic rubber, its alternative derived from crude oil, is seen ruling firm.

Related Topics