Gold will likely rise in the domestic market on Tuesday but its gains could be curbed by a dollar heading south.
The yellow metal gained in the global markets overnight on speculation that the US could continue with its stimulus measures, forcing investors to look at gold as an asset to protect their gains.
The dollar fell against a basket of major currencies with the US Treasury Secretary warning that failure by the US to raise the debt ceiling by March could lead to severe economic hardship.
Any fall in the dollar will make imports of commodities such as gold, crude oil and vegetable oils cheaper as India imports these in large measure to meet demand.
In early trade at Singapore, spot gold traded at $1,667.59 an ounce, gold futures for delivery in February quoted at $1,667.90.
In the domestic market on Monday, gold for jewellery (99.5 purity) closed at Rs 30,400 for 10 gm and pure gold (99.9 purity) ended at Rs 30,535.
The oils and oilseeds market could gain with soyabean on the Chicago Board of Trade (CBOT) rising to a six-month high on fears that supplies in the US are tightening and demand is rising from the feed industry. However, prospects of a record South American crop, especially Brazil, could limit gains.
On the CBOT, soyabean for delivery in March increased to $14.18 a bushel, while crude palm oil on Bursa Malaysia Derivatives Exchange closed at MYR 2,370 ringgit ($788.95) a tonne.
The gains in soyabean on fears of short supply will likely lift corn (industrial maize) and wheat.
On CBOT, corn for delivery in March was up at $7.24 a bushel, while for delivery the same month rose to $7.67 a bushel.
Crude oil may also head north with prices gaining in London and New York Mercantile Exchange.
Brent oil for delivery in February gained at $111.88 a barrel, while NYMEX crude closed at $94.14.
Natural rubber will also gain as a result since its alternative synthetic rubber derived from crude oil will quote higher.