Strong US retail sales data will put pressure on gold prices in the domestic spot and futures market on Wednesday.

The data along with comments from the US Fed officials that they prefer to continue paring the stimulus programme dragged the precious metal overnight in the global market.

US retail sales

Data from the US showed that retail sales were up in December. Though gold witnessed buying in China and India, in particular, earlier this week, investors continue to book profit.

Holdings in SPDR Trust, the world’s biggest gold exchange-trade fund, dropped 3.5 tonnes to 789.56 tonnes. A rally in the stock markets is also likely to see investors shifting away from gold.

In the domestic market, currency movements will have some say since a weak rupee against the dollar makes imports of gold, crude oil and vegetable oils costlier.

Spot gold, gold futures

In early Asian trade, spot gold ruled lower at $1,241.48 an ounce and gold futures maturing for delivery in February at $1,240.70.

In the domestic market on Tuesday, NCDEX spot gold had ended unchanged at Rs 29,580. On MCX and NCDEX, gold February futures could head lower towards Rs 29,000.

Crude oil

Crude oil will trade sideways, awaiting a clear picture on US stockpiles. Bets are that stocks dropped but there is some uncertainty over it. Fears over lower demand are also putting pressure.

Brent crude for delivery in February ruled at $106.32 a barrel, while US crude at $92.59.

Oils and oilseed market will see some rebound after soyabean rose significantly on the Chicago Board of Trade (CBOT).

Soyabean prices gained on concerns over weather in Argentina that could affect the crop there. Besides, sales to China from the US are also aiding the market.

On the flip side, higher palm oil stocks in Malaysia and Brazil’s upgrade of its soyabean crop are likely to cap the gains.

Soyabean, crude palm oil

CBOT soyabean maturing for delivery in March was up at $13.07 a bushel. Crude palm oil March contracts were up at 2,501 ringgit or $764.50 a tonne.

Downgrades by a couple of investments banks and rejections by China of US cargoes will put pressure on corn (industrial maize) price. Wheat, on the other hand, may look up demand from Brazil.

Corn contracts maturing for delivery in March on CBOT were down at $4.31 a bushel, while wheat contracts for the same month were up at $5.78 a bushel.