With the US coming up with economic data below expectations, the haven demand for gold is back. This will see prices of the yellow metal making further gains in the domestic spot and futures market on Friday.

Overnight, the US came up with data that showed retail sales falling in January to their lowest in 19 months and jobless claims rising. This along with the US Fed Reserve chief’s statement that the paring of stimulus programme will be in measured steps is likely to keep the bulls aggressive. Physical buying, mainly in China, too is likely to aid the uptrend.

Economic data

Further clues on the economy should be available later in the day as the European Union will come up with its estimates on the GDP and the US on industrial output.

Further favouring the precious metal is SPDR Trust reporting a rise in gold holdings in its gold backed exchange traded fund to 806.35 tonnes.

In the Indian context, the rupee’s movement against the dollar will count as any weakening of the Indian currency will make import of commodities such as gold, crude oil and vegetable oils costlier.

Spot gold, gold futures

By mid-day in Asia, spot gold was up at $1,305.24 an ounce and gold futures maturing for delivery in April at $1,305.20.

On NCDEX, spot gold closed higher on Thursday at Rs 30,085 for 10 gm.

Domestic gold futures on MCX and NCDEX maturing in April are likely to top Rs 29,250.

Brent, US crude

Winter storm in the US driving up the demand for energy products will keep crude oil prices firm. Brent crude was up at $108.60 a barrel and US crude at $100.42.

Projections of US plantings at 19.5 million hectares against the estimates of 20 million hectares and forecast of heavy rains in Brazil’s key state where soyabean harvest is on could keep the oils and oilseeds market firm.

Soyabean, crude palm oil

Soyabean on the Chicago Board of Trade for delivery in March was up at $13.49 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in April was up a 2,683 ringgit or $808.50 a tonne.

Weather woes that could affect transport and strong US sales could drive up corn (industrial maize). Wheat will gain on higher US sales and technical buying.

CBOT wheat for delivery in March was up at $5.99 a bushel and corn for delivery the same month at $4.41 a bushel.

(This article was published on February 14, 2014)
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