Gold prices on the domestic spot and futures market are likely to rule flat on Monday as the yellow metal searches for direction.

During the weekend, a better-than-expected jobs data from the US led to re-emergence of speculation that the Federal Reserve could pare pumping money into the bonds market. With funds pruning their holds in gold-backed exchange funds, the prospect looks a little dim.

In addition, the Indian Government’s move to curb gold imports in view of higher current account deficit is also a source of worry in the market. All these are pointers of the market coming under stress.

The upside for the precious metal could come from the currency movement. The rupee has slipped below the 57-level against the dollar and any further drop could propel commodities such as gold, crude oil and vegetable oils. A fall in the rupee means imports of these turn costlier.

Gold prices

In early Asian trade, spot gold ruled at $1,386.64 an ounce, while gold futures for delivery in August quoted at $1,386.

In the domestic market on Saturday, gold for jewellery (99.5% purity) slipped to Rs 27,530 for 10 gm, while pure gold (99.9% purity) fell to Rs 27,675.

On MCX, August gold contracts could hover between Rs 26,000 and Rs 27,000.

Crude oil

Crude oil is likely to rule higher as prices in the global market are up near two-week high on the US jobs data.

Brent crude for delivery in July was up at $104.67 a barrel, while West Texas Intermediate on NYMEX quoted $96.15

Oils, oilseeds

The oils and oilseeds complex could rule firm as weather uncertainty continues to cause concern over plantings in the US. Higher crude oil prices could also make people look for using vegetable oils for fuel, while any sharp drop in Malaysian stocks, data for which is expected later in the day, could act as stimulant.

In early trade, Chicago Board of Trade (CBOT) soyabean for delivery in June was down at $15.20 an bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange was up at 2,464 ringgit ($793) a tonne.

Grains complex

The grains complex could pause for clear signals on corn (industrial maize) plantings in the US. Though plantings could be higher, there are still fears that the rains that have lashed the country in the last couple of weeks could result in a couple of million acres being lost.

Lower carryover stocks are also causing concern, leading to near-month contracts rising on demand for immediate delivery. On the other hand, wheat’s direction could be decided by the health of the winter crop that is believed to have taken a hit due to frost and rain.

CBOT corn for delivery in December was down at $5.52 a bushel, while wheat for delivery in July slipped to $6.92 a bushel.

A higher crude oil price could also see natural rubber gain since its alternative, synthetic rubber, derived from crude oil will rule high.

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