Gold prices in the domestic spot and futures market are likely to come under pressure in line with the global trend on Monday.

However, the domestic market may turn firm if any unusual buying activity crops up for the wedding season in the face of supply shortage.

The Indian bullion market is starved of supplies as the Government’s norms for import that at least 20 per cent of each imported gold consignment should be exported is proving to be a stumbling block in getting the yellow metal into the country.

Otherwise, there is no justification in prices rising on Saturday after global prices dropped below $1,300 an ounce on Friday night.

The other factor that can prop up gold is a fall in the rupee as any weakening of the Indian currency against the dollar makes import of commodities such as gold, crude oil and vegetable oils costlier.

US jobs data

In the global market, the trend looks a little bearish after the US jobs data showed that more jobs had been added than expected. It has given rise to fears that the US Federal Reserve could speed up its plans to prune its $85-billion-a-month stimulus programme.

Bears will also gain strength from hedge funds and money managers raising their bets on gold falling further. Gold holdings in SPDR Trust, world’s largest exchange-traded fund, remained unchanged at 868.42 tonnes.

Spot gold, gold futures

In early trade in Asia, spot gold quoted at $1,286.35 an ounce and gold futures maturing for delivery in December at $1,285.70.

In the domestic market on Saturday, gold for jewellery (99.5 per cent purity) closed at Rs 30,790 for 10 gm and pure gold (99.9 per cent) at Rs 30,940. On MCX and NCDEX, gold December contracts could trade below Rs 30,000.

Geo-political tensions

With Iran unable to reach an accord with the six major global powers on its nuclear programme, geo-political tensions have cropped up again. This is likely to help crude oil rise.

Brent crude for delivery in December edged higher at $105.51 a barrel and US crude to be delivered the same month at $94.69.

Soyabean, crude palm oil

The oils and oilseeds market may rule firm after the US Department of Agriculture said that though soyabean yield will be higher, the acreage is some 700,000 acres lower.

Besides, it has projected a good export demand for soyabean. This could result in carryover stocks dropping marginally. However, prices could be kept under check by a higher Brazilian soyabean crop.

Chicago Board of Trade (CBOT) soyabean for delivery in January quoted lower at $12.92 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange opened higher at 2,534 ringgit or $793.50 a tonne.

Corn, wheat prices

Corn (industrial maize) scenario in the US is similar to soyabean with the yield likely to be higher and acreage lower. Wheat, on the other hand, is under pressure on expectations of higher carry-over stocks.

CBOT corn for delivery in December quoted at $4.29 a bushel and wheat for delivery the same month at $6.50.

(This article was published on November 11, 2013)
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