Gold prices in the domestic market could gain as investors are likely to go in for value buying. Also, since prices have been hammered in the past few days, technical correction is likely to set in.
In the global market, the yellow metal pared losses marginally on hopes that the recent decline could lead to buying interests since buyers in Asia are set to return after the Chinese New Year holidays.
In early trade at Singapore, spot gold was quoted at $1,643.61 an ounce, while gold April contracts ruled at $1,644.10.
The rise in the dollar against the euro could, however, put pressure on the yellow metal.
Back home, the rupee’s movement against the dollar holds key as any rise in the Indian currency will make imports of commodities such as gold, vegetable oil and crude oil cheaper.
In Mumbai on Wednesday, gold for jewellery (99.5 purity) fell to Rs 30,210 for 10 gm, while pure gold (99.9 purity) dropped to Rs 30,345.
The oils and oilseeds complex could also see some correction setting in after steep fall in the last couple of session. Overnight on the Chicago Board of Trade (CBOT), soyabean May contracts closed higher at $14.135 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil April contracts fell to 2,505 ringgit ($811) a tonne on Wednesday.
The grains complex is seen under pressure as Brazil and Argentina are projected to produce a higher corn (industrial maize) crop. Slow demand for export is likely to drag wheat.
On CBOT, wheat March contracts quoted at $7.355 a bushel, while corn contracts for the same month ended at $6.955 a bushel.
Crude oil’s rally could be under threat with production in the US rising to a 20-year high and Iran’s willingness to hold talks with nuclear inspectors from the US.
Brent crude for delivery in April slipped to $117.88 a barrel, while NYMEX crude March contracts quoted at $97.13 a barrel.
This could see natural rubber under pressure as its alternative synthetic rubber, derived from crude oil, could slip.
Keywords: Gold, domestic commodities market, global commodities market, Chinese New Year holidays, Asia, natural rubber, alternative synthetic rubber, dollar, euro, Indian currency, vegetable oil, crude oil, oils and oilseeds complex, Chicago Board of Trade, soyabean, Bursa Malaysia Derivatives Exchange, crude palm oil, grains complex, Brazil, Argentina, corn, industrial maize, wheat,