Gold likely to rule in ranges as Euro zone fears lurk

Gold is likely to rule in ranges in the domestic spot and futures market on Tuesday with prices in the global market ruling nearly one-week low.

The market is now worried that the European Union’s plan to rescue Cyprus could be used as a precedent for other European countries. This could make investors looking for safe investment instruments such as gold.

The yellow metal could also gain direction from currency movement, especially the rupee against the dollar. Any fall in the rupee against the US currency will make import of commodities such as gold, crude oil and vegetable oils costlier.

In early Asian trade, spot gold in Singapore ruled at $1,604,10 an ounce, while gold futures for delivery in June quoted at $1,604.80.

In the domestic market on Monday, gold for jewellery (99.5 per cent per cent purity) slipped to Rs 29,515 for 10 gm, while pure gold (9.99 per cent) dropped to Rs 29,650. The rupee gained 16 paise against the dollar.

The oils and oilseeds complex could head south, taking cues from the drop in soyabean prices on the Chicago Board of Trade (CBOT). Already, Malaysian crude palm has taken cues from it, dropping over 10 ringgits in early trade.

On CBOT, soyabean for delivery in May dropped to $14.37 a bushel, while on Bursa Malaysia Derivatives exchange crude palm oil for delivery in June slipped to 2,446 rinngit ($789.50) a tonne.

With rain and snow heading towards corn growing areas in the US, prices at the grains complex are likely to come under pressure. On CBOT, corn for May contract quoted lower at $7.33 a bushel, while wheat slipped to $7.27 a bushel.

Brent crude is likely to rule firm as the prices ruled nearly five-week high. Brent crude for May contract eased in early trade to $108 a barrel, while NYMEX crude quoted at $94.72.

Natural rubber prices could drop following declines on the Tokyo Commodity Exchange. August contracts were down at 277 yen a kg in early trade.

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