Gold prices in the domestic spot and futures market are likely to rule stable, though they are likely to be under pressure on bets that the US Fed could continue paring its stimulus programme.
The US Federal Reserve has already begun cutting its programme of buying assets such as bonds to keep the economy going from $85 billion to $75 billion this month.
A business survey said that that Fed officials meeting later this month could take note of the economic growth and decide to end the booster by year-end.
A falling dollar and rising equities are drawing investors away from gold. Gold which had a record a bull run since 2000 saw its fortunes reverse last year, with investors cashing out. In particular, investors in gold exchange-trade funds locked in their profits.
SPDR Trust
Gold holdings in SPDR Trust, world’s biggest exchange-traded fund, were unchanged at 789.56 tonnes on Wednesday, a four-year low.
Spot gold, gold futures
In early trading in Asia, spot gold slipped to $1,240.50 an ounce and gold futures maturing for delivery in February to $1,240.
On NCDEX, spot gold ended lower at Rs 29,450 for 10 gm on Wednesday.
Gold futures on MCX and NCDEX could rule around Rs 29,000 and are seen under pressure.
Rupee Vs dollar
Currency movements will also have a say in the domestic market since a weak rupee against a strong dollar makes import of gold, crude oil and vegetable oils costlier.
Crude oil plunges
Crude oil is set to gain as stocks in the US dropped to near two-year high at this time of the year, catching the market by surprise.
Brent crude futures maturing for delivery in February ruled at $106.74 a barrel and US crude at $94.25.
Soyabean, crude palm oil
Continuing concerns over Argentine soyabean crop and demand for US beans from China are likely to keep the oils and oilseeds market firm. Soyabean gains could help palm oil look up due to widening of the former’s premium.
Chicago Board of Trade soyabean contracts maturing for delivery in March were up at $13.18 a bushel. Crude palm oil contracts for delivery in April opened higher at 2,548 or $775 a tonne.
Wheat, corn futures
Wheat prices are under pressure from projections of a record crop in India this year and a higher crop in Ukraine. Though concerns remain over US winter crop, bets are that the threat may not result in any significant damage.
New cases of rejection of US distillers grains by China and lower ethanol production will put pressure on corn (industrial) maize.
On CBOT, wheat futures maturing for delivery in March ruled at $5.65 a bushel and corn at $4.25 a bushel.