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A rising dollar lifted by fiscal woes of the US is likely to keep gold prices firm in the bullion market here on Thursday.
In early trade, gold traded unchanged from the gains it had made on Tuesday night when it increased to the highest seen since the middle of August.
In Singapore, physical gold was quoted at $1,716.49 an ounce, gold for December delivery was a tad up at $1,717.
A strong dollar against the rupee will make imports costlier and this will reflect on the price of gold. The dollar is also kept at the higher end in view of the Euro crisis, particularly over European Central Bank chief Mario Draghi’s comment that Germany is getting sucked by the European crisis.
Fears that a report due later today could show that exports from Europe declined have also strengthened the US greenback.
In the domestic market, gold for jewellery (99.5 purity) increased to Rs 31,180 for 10 gm.
Pure gold (99.9 purity) rose to Rs 31,320.
A dipping crude oil on speculation that demand will be lower in view of likely fiscal measures of the US is likely to keep oils and oilseeds market under pressure. However, the fall is likely to be capped by the rise in the dollar. This is also likely to influence the movement of the rubber market in the spot and futures.
Overnight, soyabean for delivery in January slid to $15.08-3/4 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange closed higher for January delivery at 2,397 ringgit.
Wheat and corn (industrial maize) are likely to gain as production is seen lower in key exporting nations such as Argentina and Australia. This will boost prospects for countries such as the US and India that have surplus.
Overnight, wheat for delivery in December on the Chicago Board of Trade ended up at $8.94 a bushel, while corn for delivery the same month was quoted higher at $7.44 a bushel.
Meanwhile, crude oil on NYMEX for December delivery declined to $84.44 a barrel, while Brent oil December contracts settled at $106.82.
Sugar prices are likely to head south, despite festival demand as the global market heads lower. The fall will make exports uncompetitive despite the decline in the rupee.
On ICE U.S., raw sugar March contracts slipped to their lowest since September to 18.95 cents a pound. White sugar for delivery in December in London slid to $531 a tonne.
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