It will better to exercise caution while trading in gold on the domestic and futures market. The yellow metal turned volatile on Friday, initially dropping to as low as $1,180 before climbing back to $1,200 an ounce in early Asian trade.
But there should be little doubt that the bears have their grips firm on the precious metal and it could take a while before they loosen. If US GDP numbers have held promise to stop gold from falling on Thursday, the jobs data have given a stick to nay-sayers to beat gold.
US Federal Reserve Chairman has said that any pruning of the $85-billion monthly programme to boost economy will depend on various economic parameters that will emerge in the next few months. However, the emerging data could lead to whetting down of the stimulus package.
The recovery of gold by over $12 means Asia finds value in buying at current levels. The question is how long physical buying can continue, particularly in the face of investors and hedge funds fleeing the yellow metal.
Rupee Vs dollar
In India, the rupee’s movement against the dollar will hold key as its weakness could make import of gold, crude oil and vegetable oils costlier. But the moot point is how deep can the rupee go? Frankly, the scope is limited.
Spot, futures gold
Spot gold in Singapore rebounded to $1,204.20 an ounce, while gold futures maturing in September rose to $1,202.80.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) dropped to Rs 26,010 for 10 gm and pure gold (99.9 per cent purity) to Rs 26,145.
On MCX, gold August futures could slip below Rs 26,000.
Crude oil will see the bulls in action on signs that the US economy is recovering.
Early Asian trade saw Brent oil August contracts rising to $103.09, while West Texas Intermediate crude contracts for the same month were up at $97.27 a barrel.
The oils and oilseeds complex will continue to head south but a key data from the US Department of Agriculture could decide on the future course. The data will be released later tonight.
However, the oils and oilseeds complex is facing pressure from high inventories and lower-than-expected exports.
Soyabean, crude palm oil
Chicago Board of Trade (CBOT) soyabean new crop for November delivery slipped to $12.73, while crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in September rose to 2,370 ringgit ($744.58) a tonne.
The grains complex is also seen flat or heading a little lower on hopes of better crop and sales being lower.
CBOT corn (industrial maize) December contracts fell to $5.37 a bushel and wheat September contracts slid to $6.74 a bushel.