Gold is likely to be range-bound on the domestic spot and futures market on Monday, waiting for clear signals from the global markets.
Though the outlook still remains bearish for gold, the rupee’s movement against the dollar could hold the key. However, it remains to be seen how far the rupee can drop against the greenback given the fact that it is just short of bears’ target of 60 to the US currency.
Any fall in the Indian currency against the dollar makes import of gold, crude oil and vegetable oils costlier.
Bullish, bearish bets
Going against gold are factors such as speculators reducing their bullish bets and its holdings in electronic format dropping to the lowest in over 50 months.
According to the US Commodity Futures Trading Commission data, speculators cut their bullish bets by 29 per cent for the week-ended June 18. Holdings of bearish bets, on the other hand, increased 14 per cent.
Holdings in electronic format
Holdings of gold in electronic format in SPDR Gold Trust, the largest bullion-backed exchange traded product, declined to 989.94 tonnes during the week-end.
In early Asian trade at Singapore, spot gold quoted at $1,291.63 an ounce, while gold futures maturing in August quoted at $1,290.60.
In the domestic market on Saturday, gold for jewellery (99.5 per cent purity) gained to Rs 27,140 and pure gold was up at Rs 27,250 for 10 gm. On MCX, gold August contracts could swing between Rs 26,850 and Rs 27,050.
Crude oil is heading lower after Brent crude slipped to near $100 a barrel. Concerns over growth in China is dragging the counter, while support could come in from a Canadian transporter, Enbridge, shutting pipelines in Alberta.
Brent for delivery in August ruled at $100.61 a barrel, while West Texas Intermediate crude on NYMEX fell to 93.57
The oils and oilseeds counter could come under pressure on favourable US weather for the soyabean crop. Lower Chinese buying is also casting a shadow.
Soyabean, crude palm oil
Chicago Board of Trade soyabean for delivery in November slipped to $12.58 a bushel, while crude palm oil on Bursa Malaysia Derivatives Exchange opened almost a per cent lower at 2,416 ringgit ($751) a tonne.
The grains complex could see corn (industrial maize) under pressure in view of good US weather that will prop up the crop, while wheat may get hit on farmers reporting higher yield for the winter crop.
Chinese buying of wheat from France and other origins such as Australia could cushion the fall to some extend.
Corn, wheat prices
CBOT corn ruled at $5.47 a bushel for December contract, while wheat traded lower at $7 a bushel.
Concerns over weak demand from China could sap natural rubber. On the benchmark Tokyo Commodity Exchange, rubber dropped to 233.3 yen or Rs 140.65 a kg.