Commodities such as gold, edible oils and crude oil are likely to rise in the domestic market on Monday as the dollar hit a seven-month high against the Japanese yen. A crisis in West Asia on a standoff between Israel and Palestine could see gold and crude oil ruling firm.

Though technical correction is likely to set in the US greenback, it is still seen rising on the European crisis and Japan heading to polls next month. Progress in the US to solve the budget crisis is also a factor that could aid the dollar’s rise.

This is set to see gold make further gains in the domestic market on Monday. The yellow metal will also draw strength as Israel continued its aggressive posture in the Gaza strip.

In early trade in Singapore, spot gold was up marginally at $1,716.50 an ounce, while gold for December delivery rose to $1,716.60.

Gold gains when dollar rises since it makes imports costlier.

In the domestic market, gold for jewellery (99.5 purity) had finished higher at Rs 31,635 for 10 gm on Saturday, while pure gold (99.9 purity) was up at Rs 31,765.

The oils and oilseeds market are likely to be range-bound on the higher side as any lack of demand could be offset by the rise in dollar. India depends on import of vegetable oils to meets it’s rising demand and last season that ended in November, the country imported over 10 million tonnes.

During the weekend, soyabean for delivery in January on the Chicago Board of Trade fell to $13.90 a bushel. Crude palm oil on Bursa Malaysia Derivatives exchange had then closed lower at 2,429 ringgit ($791) a tonne.

Wheat and corn could tend to gain as a cheaper rupee makes exports competitive. Indian wheat could gain on global shortage, while corn is likely to rise in sympathy.

On CBOT, corn for December delivery closed up at $7.25-1/2 a bushel during the weekend, while wheat for delivery the same month dropped to $8.37-1/4 a bushel.

The West Asian tension could see crude oil gain and in turn, natural rubber could gain.

In early trade, NYMEX crude was up at $87.65 a barrel, while Brent crude for January delivery had closed up during the weekend at $108.62.

Factors to watch out for:

* The rupee’s movement against various currencies, mainly dollar

* The West Asian crisis between Israel and Palestine

(This article was published on November 19, 2012)
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