Gold is likely to rule higher on Friday in the domestic market following European Central Bank Chief’s statement that weakness in the euro zone will continue. Though the euro gained against the dollar, the greenback was up at 2-and-a-half-year high against the Japanese yen, triggering prospects of further rise in the yellow metal.
Japanese Prime Minister Shinzo Abe’s new economic package was also drawing Japanese funds to the precious metals.
In early trade in Singapore, spot gold was quoted at $1,673.54 an ounce, while gold futures for delivery in February in New York ruled at $1,673.80. Both gained overnight in the global market.
In the domestic market, gold for jewellery ended at Rs 30,345 for 10 gm on Thrusday, while pure gold (99.9 purity) closed at Rs 30,485.
A rise in the dollar will make imports of commodities such as gold, crude oil and vegetable oils costly as they are imported to meet rising needs in the country.
Bulls are set to dominate the oils and oilseeds market after the US Department of Agriculture report showed higher soyabean production in Brazil. Record stocks of palmolein will also add to the pressure.
On the Chicago Board of Trade (CBOT) overnight, soyabean slipped to $13.79 a bushel for delivery in March, while on Bursa Malaysia Derivatives Exchange crude palm oil for delivery the same month dropped to 2,356 ringgit ($789) a tonne on Thursday evening.
The grains complex may see corn (industrial maize) gaining on lower inventories, while wheat is seen range-bound on the lower side.
On CBOT, corn rose to near $7 a bushel at $6.98, while wheat slipped to $7.44 a bushel for March delivery.
Indian wheat could gain in sympathy with rise in corn besides reports that Africa has begun buying its wheat. A rising dollar could also make exports competitive.
Crude oil will likely to rule firm after data showed that Saudi Arabia produced less in December. This will also propel natural rubber higher since its alternative, synthetic rubber got from crude oil, will gain.
Brent crude for delivery in February ruled at $111.89 a barrel, while NYMEX crude was quoted at $94.13 a barrel.