Gold is likely to rule firm on Tuesday as gold is likely to gain from a new deal reached by international lenders with Greece. This will release emergency aids for the beleaguered European nation. However, movements of all commodities in the domestic market will hinge on the rupee’s movement after the Indian currency plunged to a two-year low on Monday.
On the other hand, talks continue to on US budget leaving the greenback under pressure.
In early trade gold, increased $ 1,750.14 an ounce by, while gold futures for December delivery was quoted at $ 1,750.60.
On Monday, gold for jewellery (995 purity) had zoomed to a record Rs 32,940 a gram, while pure gold (999 purity) surged to Rs 32,805.
Though dollar slipped against a major basket of currencies in early Asian trade, demand for rupee from importers, especially oil companies, is likely to drag the Indian currency. With foreign institutional investors locking in their profits, the demand for dollar has surged.
India depends on imports of gold and vegetable oils to meet their rising demand. As a result of the rupee’s plunge, these commodities are set to gain.
The oils and oilseed market is likely to rule firm on rupee factor and global trend. Concerns over the Brazil crop being hit is also likely to boost the complex.
Overnight on the Chicago Board of Trade (CBOT) soyabean futures for January edged up to $ 14.2475 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil for delivery in February ended higher 2,432 ringgit ($ 796) a tonne on Monday.
A weak rupee will also see Indian exports turning competitive and therefore, grains for which importing nations are turning to India, could gain.
On CBOT, corn (industrial maize) increased with December contracts rising to $ 7.4725 a bushel. Wheat for delivery the same month was up at $ 8.49 a bushel.
Crude oil is seen range-bound as Brent crude for January settled lower at $ 110.92 a barrel, while NYMEX crude slipped to $ 87.74 a barrel.
Natural rubber could follow suit.
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