Gold is likely to give up some of its gains it made in the last couple of sessions in the domestic spot and futures market, in line with the global trend.
In the global market, gold has come under pressure from a strong dollar and rising equities. However, the yellow metal could trade side-ways until the Federal Reserve Open Market Committee meeting on January 28 and 29.
Currently, gold is deriving support from physical buying in Asia, particularly China. But the rise in equities is offering investors an opportunity to shift, rendering the outlook for the yellow metal weak.
Gold holdings in SPDR Trust, the world’s largest exchange-traded fund, were unchanged at 797.05 tonnes.
In early trading in Asia, gold pared part of its overnight losses to quote at $1,242.08 an ounce. Gold for Feburary delivery next month ruled at $1,241.90
Crude oil will head north on bets that US stockpiles dropped last week. The other bullish factor is the projection by the International Energy Agency of higher demand in view of the rebound in economy.
Brent crude for delivery in March was up at $107.06 a barrel and US crude at $95.35.
Cancellation of orders
Fears that Chinese buyers could cancel US soyabean orders and switch over to supplies from South America are likely to drag the oils and oilseeds market on Wednesday. Prospects of higher palm oil carryover stocks will aid the bearish trend.
Chicago Board of Trade soyabean for delivery in March ruled at $12.83 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange for delivery in April was up at 2,595 ringgit or $779 a tonne.
Corn (industrial maize) could rise on short-covering, while wheat may come under pressure on lower export orders for US wheat.
Corn on CBOT was up at $4.26 a bushel for delivery in March, while wheat contracts for the same month fell to $5.66 a bushel.