The rising dollar will continue to cast its influence on gold that was still ruling below $1,700 an ounce in early trade on Tuesday morning.
A higher dollar will make imports of gold costlier and this will lead to the yellow metal’s price rising. In the global market, investors are looking for clues from the US presidential polls today and change in China’s leadership. Greece debt woes are also reflecting on euro, thus propping up the greenback.
The dollar was at two-month high in early trade.
Spot gold was up at $1,685.46 an ounce in Singapore, while gold for delivery in December rose marginally to $1,685.70.
In the domestic market, gold for jewellery (99.5 purity) increased to Rs 30,635 for 10 gm on Monday. Pure gold (99.9 purity) climbed to Rs 30,775.
The oils and oilseeds market are likely to come under pressure as soyabean on the Chicago Board of Trade (CBOT) dropped on hopes that the US will raise its projections on this year’s crop. But since India depends on imports of vegetable oils to meet its rising demand, the falling rupee that makes imports costly will cap the fall.
Soyabean for delivery in January slid to $15.03 a bushel.
On Monday evening, crude palm oil on Bursa Malaysia Derivatives Exchange slid to 2,411 ringgit ($788) a tonne.
The surge in dollar will make exports of corn (industrial maize) and wheat competitive. Therefore, industrial maize and wheat are likely to gain. India’s wheat tender due this week and festival demand are likely to aid the rally.
On CBOT, corn for December delivery slipped to $7.35 a bushel, while for delivery the same month was up at $8.66 a bushel.
Cotton, though down on Monday, is likely to gain on a higher minimum support price fixed by the Centre and the Government’s move to procure 90 lakh bales (of 170 kg each). The rupee’s plunge will make exports competitive.
Though cotton still ruled below 70 cents a pound on ICE U.S. overnight, the downside to cotton is limited from hereon.
Sugar could gain on festival demand and currency movements. Raw sugar for delivery in March dipped to 19.33 cents a pound, while white sugar in London ended higher at $537.60 a tonne.
Keywords: rising dollar, costlier gold imports, rising gold price, US presidential polls, change in China’s leadership, Greece debt woes, Singapore spot gold, oils and oilseeds, soyabean, Chicago Board of Trade, crude palm oil, Bursa Malaysia Derivatives Exchange, corn (industrial maize), wheat, India’s wheat tender, Cotton, higher minimum support price for cotton, Sugar, festival demand, Raw sugar, white sugar in London, global commodity market