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Gold will likely be range-bound in the domestic market as the yellow metal is failing to attract investors after the US data showed signs of economic recovery. Still, currency movements could decide its swing in the domestic market since India depends on imports to meet demand.
Last week, the rupee’s rise saw gold being dormant. In fact, the rupee rose to a three-and-a-half month high against the dollar. Any rise in the rupee makes imports of commodities such as gold, crude oil and vegetable oils – the three that top the import basket of the country – costlier.
With the Sensex hovering around 20,000 and the Government coming up with a slew of reform measures, foreign institutions could be looking to invest here. This, in turn, could boost the rupee and hence, gold prices could rule easy.
In early trade at Singapore, spot gold was quoted at $1,668.30 an ounce, while gold futures for delivery in April ruled at $1,667.20. In the domestic market on Saturday, gold for jewellery (99.5 purity) ended weak at Rs 30,240 10 gm and pure gold (99.9 purity) at Rs 30,370.
The oils and oilseeds complex could gain on dry weather in Argentina that could result in lower soyabean and corn (industrial maize) crop. Argentina is the third largest exporter of soyabean after the US and Brazil. This, in turn, will also push up palm oil and wheat.
In early electronic trade, soyabean contracts trades on the Chicago Board of Trade (CBOT) for delivery in March were up at $14.85 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil April contracts ended higher at 2,557 Malaysian ringgit ($823) a tonne during the weekend.
Corn on CBOT for delivery in March quoted higher at $7.375 a bushel and wheat contracts for March ruled at $7.66 a bushel.
Crude oil is likely to rule firm on rise in US jobs and signs of economic recovery. Brent crude was up at $116.51 a barrel in early trade for delivery in March, while NYMEX crude March contracts quoted at $97.53 a barrel.
Natural rubber will likely gain from the crude oil rally as its alternative synthetic rubber derived from crude oil is likely to rule high.
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