Gold prices are likely to come under pressure on global cues but the gains of the dollar against other currencies could cap any sharp fall.
With fears of economic slowdown and recession in the US gripping markets, the yellow metals appeal as a safe bet against rising prices seems to be waning. Overnight, a US data showed that unemployment increased and the Europe crisis showed no signs of easing.
Elections in Japan due in a month’s time indicated loosening of monetary policy, compounding things in the market.
On top of these, Thursday’s data from the World Gold Council showing a drop in consumption during the September quarter, too, had a negative effect. India was the bright spot, though. However with festivities coming to an end in India, gold could lose some of its significance.
After having dropped to its lowest in a month, gold was up marginally in early trade in Singapore at $ 1,716 an ounce. Gold for delivery in December was quoted lower at $ 1,713.80 in New York. The dollar was up against almost all major currencies early on Friday. Any rise in the dollar makes imports of gold costlier and this is seen as the factor that can prevent the yellow metal from falling.
The gloomy economic outlook could put an end to the rally that has been seen in the oils and oilseeds market in the last couple of days. Demand is seen slowing, while inventories are seen building up.
On the Chicago Board of Trade (CBOT), soyabean for January slipped to $ 14.02 a bushel overnight. Palm oil, on the hand, had closed higher at 2,425 ringgit a tonne on Bursa Malaysia Derivative Exchange on Thursday.
Grains complex are also seen easing on Friday with corn (industrial maize) and wheat slipping on CBOT.
Corn for delivery in December dropped to $ 7.21 a bushel, while wheat for delivery the same month dipped to $ 8.45-1/2 a bushel.
Despite tension in West Asia, the gloomy economy will likely put pressure on crude oil and in turn, natural rubber.
In early trade, Brent for January delivery dropped to $ 108.01 a barrel on the London-based ICE Europe. NYMEX crude for delivery the same month edged lower to $ 85.83.
Keywords: Gold, dollar, global commmodities market, economic slowdown and recession, USA, Europe crisis, increase in unemployment, Elections in Japan, monetary policy, World Gold Council, oils and oilseeds, Chicago Board of Trade, soyabean, Palm oil, Bursa Malaysia Derivative Exchange, corn, industrial maize, wheat, crude oil, natural rubber,