Gold is set to gain, at least marginally, in the domestic spot and futures market on Wednesday as US President Barack Obama got support from two key Republican Congressmen for his plan to tackle Syria.
Congressmen John Boehner and Eric Cantor said that they would back a military action against Syria, while John McCain, who took on Obama in the 2008 presidential elections, offered conditional support.
Last evening, gold gain after Israel and the US held joint missile tests in the Mediterranean. The tests sent shivers down the market’s spine, resulting in the stock markets crashing and the rupee plunging.
Along with that, probably gold made an unseemly gain. This gain will temper the rise in domestic prices on Wednesday, though the possibility of the yellow metal soaring on the US development cannot be ruled.
Rupee Vs dollar
Again, the rupee’s movement against dollar will also hold a key to the precious metal’s direction as further weakness in the Indian currency will make import of gold, crude oil and vegetable oils costlier.
The rise could, however, bring more sellers in India, similar to what happened last week. Meanwhile, holdings in SPDR Trust, world’s largest gold exchange-traded fund, dropped to 919.23 tonnes on Tuesday.
Spot gold, gold futures
In early Asian trade, spot gold was quoted at $1.413.24 an ounce and gold futures for delivery in December at $1,413.10.
In Mumbai, gold for jewellery (99.5 per cent purity) rose to Rs 32,510 for 10 gm and pure gold (99.9 per cent purity) to Rs 32, 665. On MCX, gold October contracts could trade between Rs 32,500 and Rs 34,500.
Brent, WTI crude
Crude oil could rule volatile with an upper bias in view of the developments in the US on Syria.
Brent crude contracts maturing in October were up at $115.79 a barrel and West Texas Intermediate crude contracts for the same month at $108.25.
The oils and oilseeds complex could continue to be on the boil as soyabean growing areas in the US have had one of the driest August in over 110 years. This, perhaps, could lead to lower yields.
However, 58 per cent of the crop is said to be progressing normally. The problem is forecast of hot weather continuing for another week.
Soyabean, crude palm oil
Chicago Board of Trade soyabean contracts maturing in November quoted at $13.75 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts for delivery in November opened lower at 2,408 ringgit or $729.60 a tonne.
The grains complex could come under pressure on profit-booking as the market is of the view that corn (industrial maize) has been overbought and has run up too high too soon.
Though the crop also could face problem due to the hot weather in the US, the effect is seen lower than soya.
Corn, wheat futures
CBOT corn for delivery in December ruled at $4.71 a bushel and wheat contracts for the same month at $6.45 a bushel.
Rubber futures may gain on bets that the Thailand farmers’ strike could affect exports from that country. A fall in the rupee could result in spot prices gaining as imports could turn costly.
On the Tokyo Commodity Exchange, rubber futures maturing in February were down at 283.2 yen or Rs 192.50 a kg.