So, gold is struggling to get past $1,300 an ounce. This means things are not as bullish as people, particularly in Asia, would want it to be.
A couple of developments starting from Chinese trade and its GDP and ending with US Federal Reserve Chairman Ben S. Bernanke have helped the yellow metal to hold ground. But that’s just in a market where $66 million has been cashed out in the last couple of months.
A Bloomberg report says that gold has never been the 200-day average for so long since 2001 when the yellow metal began its bull run.
Monday’s data on China’s GDP and US home sales could have given gold some home but there are other signs that are not good for the precious metal.
Rupee Vs dollar
India is taking severe measures to curb the fall of its currency. Besides, its stock market gaining strength should see more interested in equities rather than investing in gold.
Singapore is showing signs of breathing back to the path of growth. And even though data are below expectations, they are nevertheless positive. All these point to a situation in which gold will be under pressure.
On Tuesday, the yellow metal could face resistance in the spot and futures market, having made handsome gains in the last two sessions. The RBI measures to prop up the rupee means import of commodities such as gold, crude oil and vegetable oils will be cheaper.
Spot gold
In early Asian trade, spot gold in Singapore slipped to 1,281.12 an ounce and futures maturing next month fell to $1,279.50.
In the domestic market on Monday, gold for jewellery (99.5 per cent purity) ended higher at Rs 26,730 for 10 gm and pure gold (99.9 per cent purity) at Rs 26,865.
On MCX, expect August contracts to rule below Rs 26,750.
There are not much cues from gold holdings in electronic format as they were unchanged on Monday.
Crude oil
Crude oil is set to gain on speculation that US inventories have slipped for a third straight week.
Brent crude contracts maturing in August rose to $109.05 a barrel, while West Texas Intermediate for the same month traded at $106.24.
CBOT soyabean, crude palm oil
The oils and oilseeds complex is seen coming under bears’ hold with RBI’s move to hold the rupee. Prospects of higher oilseeds production in view of a favourable monsoon and global palm oil stocks rising are seen as a dampener.
Soyabean, however, gained on the Chicago Board of Trade (CBOT) on lower crushing in the US and a rise in near-by contracts.
CBOT soyabean for delivery in November was up almost half a per cent at $12.69 a bushel. Crude palm oil futures on the Bursa Malaysia Derivatives exchange traded lower at 2,254 ringgit or $708.50 a tonne.
Wheat, corn prices
Wheat and corn (industrial maize) are seen heading south. Corn is likely to fall on hopes of conducive weather for the standing US crop and Chinese data of lower than expected growth. However, Chinese demand is capping the fall.
Wheat, on the other hand, faces profit-booking by traders besides mixed reports of the US winter crop.
CBOT corn futures maturing in December fell to $5.10 a bushel and wheat futures maturing in September ruled at $6.73 a bushel.
Rubber will likely face pressure as Indian prices continue to rule far above global rates. Fears that demand from China will weaken after curbs on automobile firms are also expected to play a role.
On the Tokyo Commodity Exchange, rubber futures maturing in December ruled at 233.5 yen or Rs 140 a kg.