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Gold slipped below $1,300 an ounce in early trade on Tuesday, weighed down by two positive data from the US and Britain that gave indications of growth recovery. This, in turn, will dampen the sentiments on the domestic spot and futures market.
The dollar’s rise against a basket of currencies, too, added to the downtrend. However, in the Indian context a rise in the greenback against the rupee will make import of commodities such as gold, crude oil and vegetable oils costlier. This could cap the fall in the yellow metal.
Holdings in SPDR Gold Trust
Signs from investors, too, are not encouraging. Holdings in SPDR Gold Trust, the world’s largest gold exchange-traded fund, have slipped below 920 tonnes to 917.14 tonnes.
Gold is expected to head lower since there is not any factor that could lift it barring poor economic data. Even then, it has to be really bad. That is not happening and any data showing the slump continuing is only providing support and not driving the metal up.
Indications of an imminent end to the $85-billion US programme of buying bonds to keep the economy ticking are also putting pressure on gold. Things, then, are not bullish for the precious metal.
Spot gold, gold futures
At 9 a.m. IST, spot gold in Singapore ruled at $1,293.15 and gold futures maturing in December at $1,292.430 an ounce.
In the domestic market on Monday, gold for jewellery (99.5 per cent purity) ended at Rs 28,580 for 10 gm and pure gold (99.9 per cent purity) at Rs 28,740. On MCX, October gold contracts could fall below Rs 28,000.
Other commodities
Crude oil could be range-bound but with a bias on the higher side. Speculation that the US stockpiles could have shrank is supporting the counter.
Brent crude for delivery in September ruled at $108.43 a barrel and West Texas Intermediate contracts for the same month at 106.35.
The oils and oilseeds are also likely to trade in ranges with soyabean rising on the Chicago Board of Trade (CBOT) following forecasts of the US crop being a tad lower than initial estimates.
CBOT soyabean for delivery in November quoted at $11.81 a bushel. Crude palm oil contracts for October opened higher at 2,254 ringgit or $698.16 a tonne.
Forecast for US corn crop higher than the US Department of Agriculture is likely to drag the already bearish corn futures. On CBOT, corn contracts maturing in December dropped to $4.56 a bushel.
Wheat contracts are also on the slide on reports of better harvest in Europe. September wheat contracts on CBOT were down at $6.44 a bushel.
Rubber futures are likely to fall with the Japanese yen gaining. But heavy rains in the growing areas in Kerala are likely to affect supplies and keep the prices firm.
On the Tokyo Commodity Futures, rubber futures maturing in January fell to 244.4 yen or Rs 152 a kg.
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