Gold prices on domestic spot and futures market are expected to drop below Rs 30,000 for 10 gm following a 3 per cent fall overnight in the global market. Silver could also plunge as it slip 5 per cent overnight.
Prices crashed as gold futures dipped after geo-political tensions over Syria eased. Syria and the US, which has been threatening military action, eased their stance, allowing diplomats to tide over the issue with Russia playing a key role.
On the other hand, the US jobs data got mired in computer problems leaving a totally unclear picture.
Bleak outlook for gold
As of now, the outlook seems bleak for the yellow metal, though physical buying in Asia could support prices. But it is likely that Asian buyers could put off their purchases to allow gold to find a new bottom. In India, spot prices are likely to slip below Rs 30,000 and like in May, consumers could wait for prices to drop to levels of Rs 25,000.
In early Asian trade on Friday, spot gold recovered marginally to $1,327.81 an ounce and gold futures maturing in December to $1,327.80.
Silver also edged up a little to $22.02 an ounce, losing nearly 8 per cent this week.
Spot gold, gold futures
In the domestic market on Thursday, gold for jewellery (99.5% purity) dropped to Rs 30,215 for 10 gm and pure gold (99.9% purity) to Rs 30,365.
On MCX, gold contracts maturing in October could also trade below Rs 30,000.
Silver for delivery in December on MCX could slip towards Rs 50,000 a kg.
Crude oil is likely to trade sideways, caught between lower stocks in the US and easing tensions in West Asia over Syria.
Brent crude for delivery in October ruled at $112.81 a barrel and West Texas Intermediate for the same month at $108.56.
Oils and Oilseeds complex
The oils and oilseeds complex is likely to be firm after a US Department of Agriculture report said the crop would be lower than what it projected last month. Hot weather in the crucial Midwest areas last month has affected the yield. Still, the crop has been pegged higher at 3.149 billion bushels than what analysts forecast. It will also be higher than last year.
Chicago Board of Trade soyabean futures maturing in November pared gains in early Asian trading to $13.91 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in November closed higher on Thursday at 2,344 ringgit or $715 a tonne.
The grains complex is set to head further south as the USDA projected higher stockpiles this year and a crop larger than initial forecast. The agency sees world stockpiles rising to a 12-year high as the US crop raised the crop output forecast to a record 13.843 billion bushels.
CBOT corn contracts maturing in December fell to $4.63 a bushel and wheat contracts for the same month to $6.47 a bushel.