As investors continue to cash out, gold prices on spot and futures market are likely to rule flat on Monday. The feature of Monday’s trading, however, could be that silver could get hammered by bears.

The white metal dropped to two-and-a-half year low in the global market, while the ratio between gold and silver has climbed to its highest since then.

In early trade in Asia, spot gold quoted below $1,450 at $1,349.05 an ounce, while gold futures maturing in June fell to $1,348.30 an ounce.

Gold holdings in world’s biggest exchange-traded product, SPDR, have dropped to more than four years low to 1,038.41 tonnes.

In the domestic market on Saturday, gold for jewellery (99.5% purity) ended lower at Rs 26,120 for 10 gm and pure gold (99.9% purity) at Rs 27,255.

On MCX, gold June contracts could slip towards Rs 25,000 for 10 gm and August to Rs 25,250.

Silver, however, could come under severe pressure on domestic spot and futures market as it plunged 7 per cent in early trade in Asia. After dropping to as low as $20.69 an ounce, it recovered to $21.63.

The rupee’s movement against the dollar could cushion the fall in precious metal as any fall in its value will make imports of commodities such as gold, crude oil and vegetable oils dearer.

Crude Oil

Crude oil could rule volatile as renewal of offensive by the Syrian Government could cause some unrest in West Asia. Higher stocks with the US could still prove to be a dampener.

In early trade, Brent crude July contracts rose to $104.63 a barrel, while West Texas Intermediate (NYMEX) crude contracts for the same month were up at $95.99.

Oils and Oilseeds

The oils and oilseeds complex could heat up as China continues to buy soyabean from the US and port woes continue in Brazil.

Soyabean contracts maturing in July were up at $14.53 a bushel on Chicago Board of Trade (CBOT). Crude palm oil July contracts on Bursa Malaysia Derivatives Exchange rose to 2338 ringgit ($780) a tonne.

Grains complex

The grains complex, too, could gain as the market awaits US report on corn plantings. As of now, speculation is sowing trails last year’s and the normal coverage.

CBOT corn July contracts increased to $6.59 a bushel, while wheat contracts for the same month ruled at $6.87 a bushel.

Rubber

Natural rubber is likely to rise as the Japanese yen slipped to a four-year low against the dollar.

Rubber to be delivered in October on Tokyo Commodity Exchange gained at 292.5 yen a kg (Rs 156.25).

(This article was published on May 20, 2013)
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