Gold prices on the domestic spot and futures market are likely to rule soft as Russia has come forward to talk to Syria and bring its chemical weapons under the control of a group of nations.
US President Barack Obama sees the development as a positive one which would mean that he is willing to wait for some more time before taking any military action against Syria.
However, what is currently holding the precious metals market is the suspense of the US Federal Reserve move on the $85-billion-dollar-a-month stimulus programme.
Speculation is that it will announce reducing the money flow this month but there are also bets on the cut being lower that what is being talked out.
A clearer picture is likely to be available before the week-end and until then, there could be volatility in the market.
Spot gold, gold futures
In early Asian trade, spot gold in Singapore was down at $1,383.73 an ounce, while gold futures maturing in December slipped to $1,383.50.
In Mumbai, the market was closed on Monday for Ganesh Chathurthi.
On MCX, gold October contracts could drop to the levels of Rs 31,000.
Crude oil will also likely drop on Russia’s offer to mediate in the Syrian tangle. This has eased concern over disruption of supplies in West Asia.
Brent crude for delivery in October was down at $112.94 a barrel and West Texas Intermediate contract for the same month at $108.65.
The oils and oilseeds complex could head lower on hopes that forecasts of rain for the US Midwest region will help the crop in States such as Iowa and Illinois.
Also, the US Department of Agriculture has reported that 52 per cent of the crop on the field is in a good condition compared with 32 per cent a year ago.
In addition, better kharif oilseeds production in India will put further pressure on the complex.
Soyabean, crude palm oil
Chicago Board of Trade soyabean for delivery in November fell to $13.45 a bushel. Crude palm oil November contract on Bursa Malaysia Derivatives Exchange dropped to 2,363 ringgit or $723.50 a tonne.
The grains complex could also be bearish on Tuesday as the US Department of Agriculture finds 54 per cent of the corn (industrial maize) crop in a good shape. Wheat could drop in sympathy.
CBOT corn for delivery in December slipped to $4.61 a bushel and wheat for delivery the same month to $6.42 a bushel.