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Gold may come under further pressure on Thursday in the domestic market, taking cues from the global market. With US President Barack Obama returning from his vacation in Hawaii, hopes are bright for an end to the fiscal crisis in Washington. This could ease the dollar and, in turn, drag gold which trades in the greenback.
Though the dollar gained against the yen in early Asian forex trade, demand for the Indian rupee is set to rise from the New Year as foreign investors will likely look for investments in India.
The caveat for gold to drop, however, will be any swing in the dollar higher and Indian consumers queuing up to buy more gold. Watch out for that trend that could cap fall in the yellow metal.
Gold inched down on Thursday, spot gold dropped to $1,656.66 an ounce, while gold for deliveryin February dipped to $1,657.60.
In the domestic market, gold for jewellery (99.5% purity) declined on Wednesday to Rs 30,430 for 10 gm, while pure gold (99.9 purity) ended lower at Rs 30,565.
Low demand for US soyabean and threat of further cancellation of export deals by China dragged the grains complex overnight on the Chicago Board of Trade. However, the oils and oilseeds market could gain from threat of floods affecting palm oil supply in Malaysia.
Soyabean for delivery in January fell to $14.2450 a bushel. Crude palm oil March contracts on the Bursa Malaysia Derivatives Exchange ended higher on Wednesday at 2,430 ringgit ($796) a tonne.
With demand for export of US dormant and India announcing that it has allowed an additional 2.5 million tonnes of the foodgrain for exports, wheat and corn (industrial maize) are likely to come under pressure.
Overnight, wheat for delivery in March declined to $7.7450 a bushel and corn for delivery the same month was down at $6.9325 a bushel.
The hopes of solution to the US fiscal crisis also saw crude oil gain. NYMEX crude was above the psychological mark of $90 a barrel.
In early Asian trade, Brent crude ruled at $111.18 a barrel, while NYMEX crude quoted at $90.88.
Crude’s rise could see natural rubber gain as its derives its price strength from synthetic rubber, its alternative that is derived from crude oil.
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