After being hammered by four per cent on Wednesday, gold could find some relief on Thursday on the spot and domestic futures market.
Data showing that the US gross domestic product grew 1.8 per cent against 2.4 per cent during the same period a year ago could put the bears on the backfoot. It is unclear if the bulls could gather courage to drive up the yellow metal, though.
Unchanged holdings of gold in electronic form in exchange-traded products could also cushion gold from further fall.
The US data now could provide some hope of the Federal Reserve turning cautious on ending its package of pumping money into the economy to spur growth.
In early Asian trade, spot gold rallied over one per cent to 1,242.07 an ounce, while gold futures maturing in August were up at $1,241.40.
On MCX, gold August contracts could rise to as high as Rs 27,500.
In the domestic market on Wednesday, gold for jewellery (99.5 per cent purity) slipped to Rs 26,145 for 10 gm and pure gold (99.9 per cent purity) to Rs 26,280.
Currency movement will be yet another factor impacting gold since a weak rupee against the dollar will make import of commodities such as gold, crude oil and vegetable oils costlier. With the rupee breaching the 60-mark against the dollar, it remains to be seen how far the Indian currency can slip.
Speculation that the US Fed could extend its stimulus programme will heat up crude oil.
Brent crude for delivery in August was up at $102.24 a barrel in early trade, while West Texas Intermediate for delivery the same month on NYMEX rose to $96.07.
The oils and oilseeds complex will be one of the counters that could see the bears extend their party. With Malaysian palm oil stocks rising to record and hopes of favourable weather helping soyabean crop in the US, oils and oilseeds could drop further.
A bountiful Indian monsoon is also a bearish factor with oilseeds planting set to rise.
Soyabean, crude palm oil
Chicago Board of Trade soyabean quoted at $12.76 a bushel for delivery in November in the Asian trade. Crude palm oil on Bursa Malaysia Derivatives exchange opened lower at 2,356 ringgit ($739) a tonne.
Reports of better yield of the US winter wheat, particularly in Kansas, and higher production in the Black Sea region could see the bears dominate the grains complex too.
CBOT wheat for delivery in September fell to $6.78 a bushel, while corn for delivery in December slipped to $5.41 a bushel.
Rubber futures could rise with increase in crude oil prices. This is since natural rubber, an alternative for synthetic rubber derived from crude oil, will gain.
On the Tokyo Commodity Exchange, rubber for delivery in December was up at 231.5 yen or Rs 143.50 a kg.
Keywords: Gold prices, spot gold, gold futures, US economic data, US GDP, US Federal Reserve, Fed monetary easing, Fed stimulus, rupee, crude oil, soyabean, crude palm oil, wheat, corn, natural rubber,