Gold looks to head further south as its prices come under pressure on reports of recession fears in Europe. This is because recession is taking the sheen of the yellow metal’s value since inflation may no more be a factor to fear.

Technically, gold is trading below 200-day moving average and analysts see it heading towards $1,600 an ounce after falling to six-week on Thursday night.

Early on Friday morning, spot gold quoted lower at $1,634.75 an ounce, while gold April contracts fell to $1,635.50.

In the domestic market on Thursday, gold for jewellery (99.5 purity) was up at Rs 30,280 for 10 gm and pure gold (99.9 purity) rose to Rs 30,415 as the rupee fell against the dollar.

A rise in the dollar makes import of commodities such as gold, crude oil and vegetable oil dearer. But any fall in the Indian currency will only lessen the impact of gold’s plunge.

The oils and oilseeds complex is also set to continue its bearish run with soyabean dropping on poor export demand for US soyabean and hopes of record crop in Brazil and Argentina.

On the Chicago Board of Trade (CBOT), soyabeans March contracts declined to a month’s low of $14.18 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil April contracts fell to 2,503 ringgit ($811) a tonne on Thursday.

The grains complex is also seen under pressure with corn’s fall continuing to be one of the worst in five decades. Higher South American crop and lack of demand for US stocks are dragging corn (industrial maize). Wheat is also being pulled down in sympathy.

On CBOT, corn for March delivery fell to $6.94 a bushel, while wheat for delivery the same month quoted lower at $7.32 a bushel.

Crude oil will likely gain as geopolitical tensions continue. Brent crude for delivery in April was up at $118 a barrel, while NYMEX crude rose to $97.30.

This could see natural rubber rule firm with its alternative synthetic rubber derived from crude oil set to gain.

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