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Gold prices are set to drop below Rs 30,000 for 10 gm again in the domestic spot and futures market as the market weighs the stimulus package cut by the US Federal Reserve.
Later in the evening, Fed Reserve Chairman Ben Bernanke should reveal what the plans are for tapering the $85-billion-a-month programme, though the market is abuzz with the talk that it could be cut by $10 billion.
Anything higher than that could spell more trouble for the yellow metal.
Import duty hike
The other factor weakening the market is India’s move to raise duty on import of gold jewellery to 15 per cent.
However, things in India could change once the prices slip towards Rs 25,000 or $1,225 an ounce as demand could emerge. This will be particularly true once the kharif harvest peaks next month.
In early Asian trade, spot gold recovered marginally to $1,297.26 an ounce and gold contracts maturing in December to $1,296.60.
In the domestic market on Tuesday, gold for jewellery (99.5 per cent purity) ended at Rs 30,010 for 10 gm and pure gold (99.9 per cent purity) at Rs 30,160. On MCX, gold October contracts could drop towards Rs 29,000.
Crude stockpiles
With stockpiles in the US likely to drop to a year’s low, crude oil prices could tend to rise.
Brent crude for delivery in October ruled lower at $107.99 a barrel and West Texas Intermediate crude for the same month at $105.67.
The US Farm Service Agency report showing the acreage shelved by soyabean farmers is lower than initially estimated could drag the oils and oilseeds complex further.
According to the agency, soyabean has been planted on 74.7 million acres in the US, higher than the US Department of Agriculture forecast. Besides, the approaching kharif harvest in India and peak palm oil production season could impact the complex.
Soyabean, crude palm oil
Chicago Board of Trade soyabean contracts maturing in November dropped to $13.42 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in December opened lower at 2,377 ringgit or $734 a tonne.
Wheat and corn (industrial maize) could gain after the US Farm Service Agency report said that farmers in the US could have shelved more plantings in corn. However, higher yield is likely to make up for the lower acreage.
CBOT corn to be delivered in December was up at $4.55 a bushel and wheat for the same month at $6.44 a bushel.
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