Gold prices in the domestic spot and futures market are likely to be range-bound as attraction for buyers, especially in Asia, could be dampened by fears of further drop in prices due to US cutting its stimulus programme.
Gold’s fall to a three-and-a-half-year low during the week-end after the US Federal Reserve said it would prune its $85 billion-a-month stimulus package from next month to $75 billion, is seen as value buying.
But market signals aren’t bullish yet. Bets that gold will fall further have increased. Holdings in gold exchange-traded funds increased for the first time in seven weeks, though. Gold holdings in SPDR Trust, world’s biggest exchange-trade fund, increased to 814.12 tonnes.
Bearish bets on gold increased to 75,199 contracts, while bullish bets fell to 32,524 last week, according to US Commodity Futures Trading Commission. Rising bearish or short positions do pose a risk in that prices could rise if investors try to square them.
Spot gold, gold futures
In early Asian trade, spot gold hovered near $1,200 at $1,201.50 an ounce. Gold futures for February delivery fell to $1,200.70.
On NCDEX, spot gold (Mumbai delivery) ended at Rs 29,655 for 10 gm during the week-end. Gold futures on MCX and NCDEX for delivery in February could slip towards Rs 28,000.
Crude oil
Crude oil prices are likely to rule firm on prospects of economic growth with US crude set to top $100 a barrel. Brent crude for delivery in February quoted at $111.82 a barrel and US crude at $99.27.
Oils and oilseeds market may get a helping hand from hot weather in Argentina threatening the soyabean crop there. However, winter curbing the demand for palmolein could be a dampener as also China cancelling US soyabean cargoes.
Soyabean, crude palm oil
Chicago Board of Trade soyabean contracts maturing for delivery in March ruled at $13.30 a bushel. Crude palm oil March contracts were up at 2,609 ringgit or $793 a tonne on Bursa Malaysia Derivatives Exchange.
Corn (industrial maize) could be range-bound as outlook for better weather cancels out the Argentine effect.
Though snowfall threatens US winter wheat, higher Canadian and Australian production are keeping it on leash.
Corn futures on CBOT for delivery in March ruled at $4.32 a bushel, while wheat futures for the same month quoted at $6.15 a bushel