Gold is likely to be in ranges with a bias towards the upper side as the market awaits the outcome of a key meeting of the US Federal reserve from Tuesday.
A decision whether the US will continue its programme of buying $85 billion worth treasury and mortgage bonds every month will be clear on Wednesday after the meeting.
Speculation is rife that the US may begin paring its purchases, leading to strengthening of the dollar against other currencies. This, in turn, will hurt the rupee and lead to rise in prices of commodities such as gold, crude oil and edible oils.
In early trade in Asia, gold edged up to $1,391.20 an ounce, while gold futures maturing in August quoted at $1,390.50.
In the domestic market on Saturday, gold for jewellery (99.5% purity) rose to Rs 27,905 for 10 gm and pure gold (99.9% purity) to Rs 28,050.
On MCX, gold August contracts may touch Rs 27,900.
The outlook for gold, however, is bearish since holdings of gold in electronic form on exchange-traded products is down to a 25-monthlow of 2,117 tonnes.
Crude oil is likely to heat up as the US has cleared arming of Syrian rebels, leading to tension in West Asia.
Brent crude contracts that will mature in August were up at $105.75 a barrel, while West Texas Intermediate on NYMEX rose to $97.54.
Oils and Oilseeds
The oils and oilseeds counter is likely to head south as soyabean have plunged to year’s low on weather conditions turning favourable to grow. Also, slow buying by China has led to fears that soyabean stockpiles could rise.
Chicago Board of Trade soyabean for delivery in November slipped in early Asian trade to $12.85 a bushel, while crude palm oil on Bursa Malaysia Derivatives Exchange was up at 2,446 ringgit ($784) a tonne.
The favourable weather for crops, particularly corn (industrial maize) will also have the bears busy on the grains counter.
CBOT corn for delivery in December fell to $5.28 a bushel, and wheat September futures slipped to $6.75 a bushel.
The fall in the Japanese yen against the dollar lifted rubber with rise in crude oil prices lending further support.
November contracts on Tokyo Commodity Exchange rose to 241.3 yen or Rs 146.50 a kg.