Gold could lose some of its shine on Thursday in the bullion market as prices in the global market hovered over a month-and-a-half low. But a stronger dollar and festival demand could prevent sharper fall in the yellow metal.
Though a rising dollar will make imports costlier, gold is unlikely to gain from the trend in view of its fall in the last two sessions. Moreover, the dollar has pared its gains in early trade and this will ensure that any gain in the precious metal will be minimum.
In early trade on Thursday, gold recovered from its fall below $1,700 an ounce to quote at $1,706.79. Overnight, it had dropped to as low as $1,698, something not seen since the first week of September.
US gold for December delivery was also up at $1,707.90.
The grains counter is likely to see gains in view of Ukraine planning to curb exports from November 15. While demand for Indian wheat could increase, at least as feed, in view of this, industrial maize (corn) could also indirectly benefit. Any rise in wheat prices could result in demand for corn from India as feed in the Far-East and South-East Asia.
Wheat on the Chicago Board of Trade, overnight, eased after gaining two per cent on Ukraine’s plan. December wheat contracts ended lower at $8.82 a bushel, while corn for December delivery was unchanged at $7.54 a bushel.
Oils and oilseeds are likely to gain from the rise seen in vegetable oils prices in the global market in the last two days. Besides, the strong dollar is likely to help prices rally.
On CBOT, soyabean for delivery in November dropped to $15.68 a bushel but it was just a shade off the highs it hit on Wednesday. Malaysia palm oil ended above 3,000 ringgit on Wednesday on Bursa Derivatives Exchange at a five-month high of 3,195 ringgit or $1,016 a tonne.
Crude oil is set to feel the heat of the overnight fall in Brent oil and NYMEX crude as concerns over economy continue to haunt markets. Higher crude oil stocks in the US have added to the dampened sentiment.
This could also keep rise in vegetable oils prices under leash. Natural rubber prices are also likely to cool as a result.
Brent crude for December delivery was quoted at $107.90 a barrel in early trade, while NYMEX crude for November ruled at $85.81.
Sugar prices are likely to be bitter for producers as the global market has dropped to a three-week low. Lack of demand during month-end and the Centre’s statement asking mills to exhaust the monthly open sale quota on time will sour things more in the counter.
A lower price for crude oil could also see Brazil switching over to a higher sugar production, resulting in more pressure on the counter.
Raw sugar for delivery in March on ICE US ended 19.68 cents a pound, while in London white sugar December contracts closed at $545.70 a tonne.