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Gold is set to rule sideways on Tuesday on domestic spot and futures markets with investors looking forward to the US Federal Reserve to announce its schedule for paring of the stimulus programme.
With an end to the $85 billion a month bond buying programme a foregone conclusion, market players are looking for the date from when it will begin. Indications are that it could begin from March, though an advance or delay is not ruled out.
The Federal Reserve is meeting today and tomorrow to take a view on the US economy and the stimulus programme.
The market is already witnessing short-covering ahead of the imminent tapering schedule.
Outgoing Chairman Ben Bernanke told a gathering last night that the Fed Reserve has communicated “the likely future path of policy rate…”
Further strength for the bears came from the SPDR Trust data that showed holdings in the world’s biggest exchange-traded fund had dropped to 818.90 tonnes.
Even as the Fed will be meeting, it could get further clues of the economy from US week chain store sales and housing market index.
By mid-day in Asia, spot gold looked up at $1,240.15 an ounce and gold futures maturing for delivery in February at $1,240.50 on short covering.
In the domestic market, NCDEX spot gold for delivery in Mumbai ended lower at Rs 30,085 for 10 gm on Monday
On MCX and NCDEX, gold futures maturing for delivery in February could trade between Rs 29,250 and Rs 29,750.
Crude oil, oilseeds
Crude oil could come under pressure on speculation that stocks in the US dropped last week.
Brent crude for delivery in February was down at $109.20 a barrel and US crude at $97.27.
The oils and oilseeds market could be range-bound, caught between a threat of dry weather in the US and fall in palm oil usage due to winter. Besides, beginning of the peak crushing season in India could keep prices on leash.
Chicago Board of Trade soyabean for delivery in March ruled low at $13.21 a bushel. Crude palm oil futures for delivery in March opened lower at 2,598 ringgit or $796.50 a tonne on Bursa Malaysia Derivatives Exchange.
Projections of a record crop and weak exports from the US are set to put pressure on corn (maize). Wheat is also set to head south on lower demand for the US grain and competition from Indian and Australian wheat. Further, winter could hamper freight movement.
CBOT corn for delivery in March fell to $4.22 a bushel and wheat for the same month dropped to $6.21 a bushel.
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