Gold could continue to search for direction on Wednesday in the domestic spot and futures market. The market could get some cues from the minutes of the October 29-30 US Federal Reserve meeting that will be released later in the day.

Bernanke's comments

Lending support to gold is US Federal Reserve Chairman Ben S. Bernanke’s comments that a few months of economic data have not altered the Fed’s view that the American economy is gaining strength. Nor does it have an intention to start pruning its $85-billion-a-month stimulus programme.

Though the US labour market is showing signs of improvement, more proof is needed before the winding up the stimulus programme can be done.

The comments have not really set the counter on fire as it is stuck near a week’s low.

Bearish outlook

Money managers and hedge funds are still bearish about gold with one view that gold’s halt near $1,280 is temporary before it can head below $1,150.

Holdings in SPDR Gold Trust, the world’s biggest exchange-traded fund, fell to 863.01 tonnes on Tuesday. It is a four-and-a-half-year low.

Spot gold, gold futures

In early Asian trade, spot gold was stuck at $1,275.96 an ounce and gold contracts maturing for delivery in December at $1,275.10.

In the domestic market on Tuesday, gold for jewellery (99.5 per cent purity) fell to Rs 30,915 for 10 gm and pure gold (99.9 per cent purity) to Rs 31,165.

On MCX and NCDEX, gold December contracts are likely to drop below Rs 30,000 and trade at those levels for a major part of the day.

Iran nuclear talks

The resumption of talks on Iran’s nuclear programme is providing some glimmer of hope to bulls to drive crude oil up. Speculation that stockpiles in the US dropped last week will aid the trend.

Brent crude for delivery in January was up at $107.27 a barrel and US crude at $93.60.

Soyabean plantings

The oils and oilseeds market could come under pressure on reports that soyabean plantings in South America are progressing at a good pace.

Brazil has reported higher plantings compared with the same period a year ago, while the weather is seen conducive in Argentina, an area of concern until now.

Moreover, growers in Brazil are still holding back a large portion of the harvested crop, just enough to put pressure on prices.

Chicago Board of Trade soyabean contracts maturing in January ruled at $12.76 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil January futures fell to 2,550 ringgit or $801 a tonne.

Corn, wheat may gain

Corn (industrial maize) and wheat are likely to gain with most investors having gone short.

Many are holding short-positions and will need to cover. Also, signs are that both have been oversold. A concern though is China rejecting a corn shipment from US on grounds that it was tainted with GM.

Wheat for delivery in March quoted at $6.58 a bushel and corn contracts for the same month at $4.26 a bushel.