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Gold prices are likely to rule steady on domestic and spot futures but could come under pressure on limited physical demand.
Evidence of slack physical demand has come through a drop in premium in Shanghai gold exchange to less than $2 on Friday from over $10 earlier this week. While data from China and Europe showed that economic growth is still to gain traction, factory activity in the US speeded up in February to its best since 2009.
A rise in equities and stocks is likely to add further pressure on gold. The other bearish factor is the paring of the stimulus package by the US Fed Reserve, which has already cut the booster by $10 billion each in January and this month to $65 billion.
Economic activities could begin to gather pace once the cold weather clears in the US.
In the Indian context, any weakening of the rupee against the dollar will make imports of gold, crude oil and vegetable oils cheaper.
By mid-day in Asia, spot gold in Singapore was down at $1,319.80 an ounce and gold contracts maturing for delivery in April at $1,319.70.
On NCDEX, spot gold (99.9% purity) dropped to Rs 30,640 for 10 gm.
Gold futures contracts due for delivery in April are likely to rule around Rs 30,000.
Cold weather in North America and rising demand for heating fuel will keep crude oil prices firm.
Brent crude contracts maturing for delivery in April were up at $110.30 a barrel and US crude at $102.76.
The oil and oilseed market will rule firm as demand for US soyabean continues and plantings of the crop in the US could be below expectations. Also, the crop in South America may not match expectations. A better picture will be available later in the day when the USDA releases its weekly export sale data.
Higher palm oil exports from Malaysia will also help the uptrend.
Chicago Board of Trade soyabean May contracts were quoted at $13.43 a bushel. Crude palm oil contracts for the same month opened lower at 2,731 ringgit or $827 a tonne.
Political unrest in Ukraine and projections of lower corn plantings in the US are likely to drive corn (industrial maize) higher. But profit-booking and snow cover saving US wheat from extreme cold will drag wheat.
CBOT corn for delivery in May was up at $4.62 a bushel and wheat for the same month at $6.15 a bushel.
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