Gold prices on domestic spot and futures market are likely to rule sideways on Thursday as the global market swings between hope and despair over a slew of issues.
Even as investors are worried over the tapering of the US Federal Reserve’s $85 billion a stimulus month programme, falling dollar and stocks are providing support to the precious metal.
The US Fed will take a decision on the stimulus programme during its December 17-18 meeting. The concerns have increased after US Congressmen reached a deal on Budget that curbs automatic spending and reduces deficit.
The deal has remove uncertainty in the market and thus premium for gold gets reduced, turning the outlook negative for gold.
However, a section of analysts feel that gold is deriving strength at $1,250 an ounce that it reached earlier this week.
But investors aren’t bullish going by holdings in gold exchange-traded funds. SPDR Trust, world’s largest exchange-traded fund, said its gold holdings dropped further to 833.61 tonnes.
Gold’s movement in India
In the Indian context, a hiatus in the marriage season in South India during December 15-January 15 is reducing the premium gold is enjoying over global prices. The premium is being paid since imports of the yellow metal have become difficult and supplies have dried up.
The rupee’s movement against the dollar will also count since any rise in the rupee against the dollar makes imports of gold, crude oil and vegetable oil cheaper.
Later in the day, data on Euro zone industrial production, US weekly jobless claims and retail sales could provide further cues to gold’s movements.
Spot gold, gold futures
In early Asian trade, spot gold ruled at $1,254.67 an ounce and gold futures maturing for delivery in February at $1,254.10.
NCDEX spot gold rose to Rs 30,400 for 10 gm on Wednesday.
On MCX and NCDEX, gold February futures are likely to rule between Rs 29,500 and Rs 30,000.
Crude oil stockpiles
Crude oil will likely head higher after the International Energy Agency reported of pick-up in demand which could result in prices rising over the next few months.
Lower stockpiles in the US are also driving it higher.
Brent crude for delivery in January was up at $109.53 a barrel and US crude at $97.38.
Oils and oilseeds market
The oils and oilseeds market could look up on demand for US soyabean and soyameal. But the progress of the soyabean crop in South America could be a limiting factor.
Chicago Board of Trade soyabean for delivery in January was quoted at $13.40 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in February was up at $2,645 ringgit or $820.50 a tonne.
Grains complex
Wheat prices could rise on technical buying, while corn (industrial maize) may gain on projections of higher offtake for ethanol production.
CBOT wheat maturing for delivery in March was up at $6.41 a bushel and corn for the same month at $4.38 a bushel.