Gold prices in the domestic spot and futures market are likely to be rangebound on Tuesday on bets that the current rally has been over-stretched. Strengthening of dollar is also likely to put pressure on the yellow metal.

Gold has rallied from last week-end on higher Chinese buying, mixed US data leading to speculation that the Fed Reserve may go slow in paring the stimulus package and weak equities market.

Chinese buying

However, the general view now is that Chinese buying of gold will be lower this year from the record seen last year as the precious metal is under pressure. The view gained support from the volumes on the Shanghai exchange dropping to a two-week low.

In the domestic market, the currency movement could have some say as any weakening of the rupee against the dollar makes import of gold, crude oil and vegetable oils costlier.

Spot gold, gold futures

In early trading in Asia, spot gold was quoted at $1,252.31 an ounce and gold futures for delivery in February at $1,251.90.

On NCDEX, spot prices had ended at Rs 29,700 for 10 gm on Monday.

On MCX and NCDEX, gold futures for February delivery are likely to trade between Rs 29,000 and Rs 29,250.

China's industrial growth

Crude oil could continue to face pressure in the face of slower industrial output growth in China. Brent crude for delivery ruled flat at $106.34 a barrel and US crude at $93.96.

Hopes of demand from China for US soyabean will support the oils and oilseed market.

Oils, oilseeds

On Chicago Board of Trade electronic trading, soyabean March contracts ruled at $13.11 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil April contracts opened lower at 2,577 ringgit or $777 a tonne.

Higher supply and carryover stocks are set to pile pressure on wheat and corn (industrial maize).

CBOT wheat for delivery in March ruled at $5.64 a bushel and corn for the same month at $4.23 a bushel.