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Gold prices in the domestic spot and futures market are likely to rule firm on Monday as traders await the outcome of the US Federal Reserve’s two-day meeting starting tomorrow.
Gold is likely to get support on buying for Dhanteras, Diwali and the ongoing wedding season.
The US Fed is expected to continue its $85 billion-a-month stimulus package since signs of a rebound in the economy are not clear. It will also look into the US Government shutdown early this month and how it has affected the economy.
Bullish, bearish factors
A clear picture will be available late Wednesday. In between, there are a couple of factors that are both bullish and bearish.
Helping the bulls is the purchase of gold by Turkey and Kazakhstan but Russia pared its reserves, an International Monetary Fund report said.
Encouraging bears are the drop in holdings in gold-exchange traded funds and hedge funds cutting their bullish bets on the precious metal. Gold holdings in SPDR Trust, the world’s largest gold exchange-traded fund, fell to 872.02 tonnes during the week-end.
US data awaited
A slew of US data, particularly factory output, this week will also hold key to gold’s movement.
In Asia, spot gold rose to $1,351.65 an ounce and bullion contracts maturing in December to $1,351.70.
In the domestic market on Saturday, gold for jewellery (99.5 per cent purity) ended higher at Rs 32,015 for 10 gm and pure gold (99.9 per cent purity) at Rs 32,165.
On MCX, gold futures expiring in December could trade below Rs 31,000.
Range-bound trading
Crude oil could be range-bound awaiting further clues on how the economy is faring. Currently, higher US stocks are dampening the market.
Brent crude for delivery in December ruled at $107.20 a barrel and US crude for delivery the same month at $97.72.
The oils and oilseeds complex could seek lower levels on soyabean harvest gathering pace in the US and profit-booking. Easing of the low pressure area in India will also likely help kharif harvest, though damage to the standing oilseeds crops is yet to be assessed.
Soyabean, crude palm oil
In early trade, Chicago Board of Trade soyabean for delivery in January fell to $12.87 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in January was quoted at 2,444 ringgit or $777.50 a tonne.
With Indian wheat on offer in the global market and wheat’s premium to corn widening by over $2.5 a bushel, the grain could be under pressure on fears that there could be shift to corn (industrial maize) by users.
Corn, on the other hand, still continues to be under pressure on US harvest, higher yield and a forecast of record crop. India, too, is looking forward to a record drop but rains last week may have affected the crop in Andhra Pradesh and Maharashtra.
CBOT wheat December contracts dropped to $6.88 a bushel and corn contracts for the same month slipped to $4.38 a bushel.
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