Gold is likely to come under pressure on Tuesday as the dollar remains near a month’s low against the euro but jewellery demand is likely to deter any sharp drop. However, the fall of the Japanese yen to a three-month low against the dollar could check the fall.
Any fall in the dollar will make gold imports cheap and this is the likely trend for the yellow metal. Investors in gold are also looking for cues from the US Federal Reserve policy. The Fed had announced buying $40 billion mortgage-backed bonds until the job scenario improved in the US. So far it has not acted on the statement and the policy statement could hold cues to it.
In early trade on Tuesday in Singapore, gold ruled steady at $1,727.94 an ounce, rebounding from a month’s low of $1,713.
US gold for delivery in December was steady at $1,729.30 an ounce.
In the domestic market, gold for jewellery (99.5 purity) ended lower at Rs 30,900 for 10 gm on Monday, while pure gold (99.9 purity) ended down at Rs 31,040.
The rupee also gained 37 paise on Monday at 53.47 to the dollar.
Grains could see some selling pressure after the US wheat slid in early trade but oilseeds and edible oils are likely to benefit from the rise in soyabean for the second consecutive day. Industrial maize (corn) could also be under pressure on cues from the global market.
Wheat’s drop ended a four-day rally that was boosted by worries over lower supply and weather hurting crop in the US and Australia. Reports of Ukraine stopping exports from November 15 also had a hand in the run-up.
Wheat on the Chicago Board of Trade (CBOT) for December delivery ended lower at $8.76 a bushel, while corn for delivery in December slid to $7.60 a bushel.
Soyabean gained as farmers clamped down on their produce, while Malaysia is seen gaining on strong exports. Soyabean on CBOT for November delivery was up at $15.48.
Crude oil could continue to feel the heat of concerns over global economy despite geo-political tensions in West Asia. Brent oil December contracts dropped below $110 to $109.44 a barrel, while NYMEX December contracts fell to $88.65.
Natural rubber prices, too, could come under pressure but trading is likely to be muted in view of a holiday in Kerala that contributes over 90 per cent of the production in the country.