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Gold is likely to under pressure on spot and futures market on Wednesday as the dollar gains and India threatens to curb the yellow metal’s imports.
Investors exit from gold-backed funds that had slowed during the last couple of days resumed, adding to the downtrend.
A report from the Organisation for Economic Cooperation and Development said that inflation in industrialised nations rose by the lowest margin in 44 months.
In early Asian trade, spot gold was quoted at $1,400.12 an ounce, while gold futures maturing in August ruled at $1,399.40.
In the domestic market on Tuesday, gold for jewellery (99.5% purity) fell to Rs 26,9 and pure gold to Rs 27 for 10 gm.
On MCX, gold August contracts could trade between Rs 29,200 and Rs 29,400, while June contracts could sway between Rs 26,900 and Rs 27,100.
Currency movements will also have a bearing on gold’s direction as any fall in the rupee against the dollar will make imports of gold, crude oil and vegetable oils costlier.
Crude oil will likely gain as stockpiles in the US are reported to have dropped to a six-month low.
Brent crude for delivery in July rose to $103.44 in early trade, while West Texas Intermediate crude for delivery the same month was up at $93.80.
Reports that a Chinese firm has bought 7.9 lakh tonnes of soyabean are likely to turn the oils and oilseeds complex bullish. However, speculation that plantings in the US are set to resume will temper the rise to some extent. Currently, soyabean has been planted in some 57 per cent of the normal 74 per cent.
Soyabean for delivery in July slipped to $15.25 a bushel, while on Bursa Malaysia Derivatives Exchange crude palm oil for delivery in August dropped to 2,375 ringgit ($768) a tonne.
The grains complex could be mixed with wheat gaining on fears of damage to the US wheat, while corn (industrial maize) may come under pressure as sowing is likely to resume after floods have receded. Heavy downpour in Kansas and Texas is likely to affect the yield of the winter crop in the US.
Corn has been completed in 91 per cent of the normal 95 per cent area. But reports of higher global production are dragging the counter.
On Chicago Board of Trade, corn for delivery in December slipped to $5.48 a bushel.
Wheat for delivery in July rose to $7.11 a bushel.
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