Gold is likely to come under pressure in the domestic spot and futures market after prices tumbled overnight on US data showing better economic growth.
The European Central Bank lowered its interest rates to help the economy grow and prevent inflation from casting pressure on it. This resulted in the dollar gaining strength, thereby dragging gold.
At one point of time, gold slipped below $1,300 an ounce before recovering to some extent.
Trade, economic data
Trade and economic data will also play a key role in gold’s movement. The first data that rolled out in the morning was from China showing that exports increased more than what was expected. Imports, too, increased but China was still left with a trade surplus.
Later in the day, Germany will be releasing its trade data and the US will release its data on jobless rate and non-farm payrolls.
Any signs of rise in US jobs and non-farm payrolls will be a dampener on gold.
Spot gold, gold futures
By mid-day in Asia, spot gold ruled at $1,308.90 an ounce and gold futures maturing in December at $1,308.40.
In the domestic market on Thursday, gold for jewellery (99.5 per cent purity) increased to Rs 30,735 for 10 gm and pure gold (99.9 per cent purity) to Rs 30,885.
On MCX and NCDEX, gold December contracts could drop below Rs 30,000.
Crude oil may head north on signs of economic recovery all around. But the easing geo-political worries could check the rise.
Brent crude for delivery in December ruled at $103.35 a barrel and US crude for the same month at $94.42.
The oils and oilseeds market could rule range-bound as the market awaits world supply and demand outlook from the US Department of Agriculture later in the day.
However, Chinese buying is supporting soyabean with exports from the US showing signs of rising. Reports on Brazil crop could also give a direction to the market. On the other hand, a drop in Malaysian palm oil prices could be a dampener.
Chicago Board of Trade soyabean contracts maturing in January dropped to $12.35 a bushel. Crude palm oil January contracts on the Bursa Malaysia Derivatives Exchange slipped below $800 a tonne to $796.30 or 2,537 ringgit.
Wheat, corn prices
Wheat and corn (industrial corn) are also commodities that will be under pressure before the world supply-demand outlook. Besides, talk of the US environmental agency cutting the ethanol blending level is putting pressure on corn.
CBOT wheat for delivery in December quoted at $6.53 a bushel and corn for the same month at $4.20 a bushel.