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Rising rupee and weak global cues took the glitter off gold on Thursday. The yellow metal declined further as the rupee rallied against the dollar to a one-month high. The rupee ended at 54.14 against Wednesday's 54.54.
A strong rupee makes imports of dollar-denominated commodities such as gold cheaper. Moreover, the recent selloff has left gold vulnerable to more corrections.
According to reports, Goldman Sachs lowered its average three-month price forecast for gold to $1,825 an ounce from $1,840, while its six-month forecast was cut to $1,805 from $1,940.
The market is also eyeing the US non-farm payrolls data that will be released on Friday for more cues. A stronger-than-expected payrolls data may boost the dollar and further weigh on gold prices.
However, physical and investment demand for gold is improving as the downward revision in gold prices has pushed up retail purchases.
Gold for jewellery (99.5 purity) dropped by Rs 390 for 10 gm to Rs 30,700, while pure gold (99.9 purity) slid by a similar margin to Rs 30,840.
Globally, in Europe, gold prices traded almost flat on investors’ cautiousness ahead of a European Central Bank policy announcement amid concerns over US fiscal crisis. Spot gold bid little changed at $1,693 an ounce.
The oils and oilseed counter bounced back today as palm oil snapped its week-long losing streak on reports that inventories in Malaysia will fall from a record as production declines. Palm oil for February delivery ended at 2,284 ringgit ($751) a tonne on the Malaysia Derivatives Exchange. US soyabeans climbed to 1-month high on robust demand from exporters as well as domestic processors.
As such, the grains counter too saw some positive movement with wheat snapping its four-session slide and corn gaining on bullish US ethanol data.
On the Chicago Board of Trade, soyabeans for January delivery settled up 1.6 per cent, at $14.79-1/4 a bushel.
CBOT March corn ended up 0.8 percent, at $7.57-3/4 and March wheat rose 0.4 per cent to $8.60 a bushel.
Rising inventories caused crude oil to slip with Brent for January settlement on the London-based ICE Futures Europe exchange declining by 15 cents at $108.66 a barrel.
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