Gold is likely to come under pressure again as the dollar tended to weaken against the basket of major currencies. Purchases of gold by central banks could prevent the fall of the yellow metal that seems to be losing lustre as the US reported improved industrial activity in November.
Industrial production in the US was at a five-month high and a similar data from Europe later in the day could further provide clues on how the economy is shaping up. On the other hand, the dollar tended to slip on hopes that a package to bail out Greece looms large.
India depends on imports to meet its demand for gold and any drop in the US greenback results in costs easing.
Gold was flat in early trade in Singapore at $1,729.14 an ounce, while gold futures for delivery in December ruled at $1,729.70.
On Wednesday, gold for jewellery (99.5 purity) declined to Rs 31,800 for 10 gm, while pure gold (99.9 purity) slid to Rs 31,945.
The declining trend in the dollar could mean that prices of imported oil could drop. That could see crude palm oil and soyabean ruling lower. However, exporters demand for groundnut could see indigenous oils gains since there is supply shortage of groundnut and sunflower. Moreover, technical selling has set in with charts showing overbought positions.
Overnight on the Chicago Board of Trade (CBOT), soyabean futures for delivery in January slipped to $14.07. On the Bursa Malaysia Derivatives Exchange, crude palm oil for February delivery fell to 2,443 ringgit ($798) a tonne on Wednesday.
Concerns over supply have cropped again in wheat and this is likely to result in its prices gaining. On CBOT, wheat for delivery in December was up at $8.47 a bushel.
This in turn is likely to help corn (industrial maize) rise though on CBOT, corn for December delivery slipped to $7.39-1/2 a bushel.
Crude oil is likely to gain on reports that there has been a fall in US stockpiles besides indications of better growth. This could lead spot rubber up.
Brent crude oil for delivery in January was above $110 a barrel at $111.03. NYMEX crude for January delivery was up at $87.67.
However, market could be seeing a lower volume as the US markets are closed on Thursday for Thanksgiving.
Keywords: Gold, Weakening dollar, Purchases of gold by central banks, improved industrial production in the US, package to bail out Greece, crude palm oil, soyabean, groundnut, sunflower, Chicago Board of Trade, Bursa Malaysia Derivatives Exchange, corn (industrial maize), Crude oil, rubber, NYMEX, US markets are closed for Thanksgiving, wheat