Gold is likely to be under pressure after prices dropped in the global market on signs that inflation in general is receding and employers in the US perhaps provided more jobs in January.
A fall in inflation cuts into the appeal for gold that is seen as a hedge against soaring prices of commodities.
The rising rupee, in demand from institutions abroad to invest in stocks and other markets, is also likely to add to the pressure. A higher rupee makes import of commodities such as gold, crude oil and vegetable oils cheaper.
In early trade at Singapore, spot gold was down at $1,661.75 an ounce, while gold futures to be delivered in April quoted at $1,662.20.
The rupee on Thursday had closed firm at 53.21 against the dollar, a three-and-a-half-month high. In the domestic market, gold for jewellery (99.5% purity) ended lower at Rs 30,335 for 10 gm, while pure gold (99.9 purity) finished at Rs 30,470.
Oils, oilseeds
Oils and oilseeds complex will also face pressure after Argentina received rains. The showers had eased concerns over soyabean and corn crops in South America. Earlier, dry weather had driven the prices of soyabean and corn (industrial maize) to a six-week high.
Overnight, soyabean March contracts on the Chicago Board of Trade (CBOT) declined to $14.62 a bushel. '
Crude palm oil April contracts on Bursa Malaysia Derivatives Exchange on Thursday had ended higher, on hopes of inventories getting reduced, at 2,557 ringgit ($823) a tonne.
Grains prices
The grains complex will also come under pressure in view of the showers in South America.
On CBOT, corn futures slid to $7.37 a bushel, while wheat dropped to $7.81 a bushel.
Crude oil
Crude oil, however, will likely gain on hopes of more jobs being added in the US. This would mean that the demand will rise.
Brent crude for delivery in March rose to $115.55 a barrel, while NYMEX crude for March contract ruled firm at $97.61.
Natural rubber, lying dormant during the last couple of sessions, could gain as a result since its alternative synthetic rubber, derived from crude oil, may firm up.