Gold prices are likely to come under pressure in the domestic spot and futures market on Thursday as concerns that the US Fed Reserve will continue to prune its stimulus programme resurface.
The release of the Fed’s Open Market Committee Meeting minutes on Wednesday night indicated that officials do not favour any slackening of pace in cutting the stimulus package, which has been reduced by $10 billion each in January and this month to $65 billion.
Fed stimulus taper
Indications from the minutes are that the tapering will continue unless and until there is an alarming drop in growth.
Last month’s poor growth in the US is seen as a fallout of the cold snap that has continued this month too. The general consensus is that the economy could begin to expand once the weather clears.
In the Indian context, currency movement could have some impact as a weak rupee against a strong dollar makes import of gold, crude oil and vegetable oils dearer.
Spot gold, gold futures
By mid-day in Asia, spot gold in Singapore dropped to $1,310.16 an ounce and gold futures maturing for delivery in April at $1,311.
On NCDEX, spot gold ended at Rs 30,700 for 10 gm.
On MCX and NCDEX, gold futures maturing for delivery in April could be under pressure to drop below Rs 30,000.
Demand for crude oil
Crude oil prices are likely to rule firm as cold weather continues in North America, leading to increased demand for fuel, and stockpiles drop.
Brent crude for delivery in April was up at $109.95 a barrel and US crude March contracts at $103.16.
Oils and oilseeds market could see prices under pressure as the global soyabean market has come under pressure from players booking profit. With the weather clearing up in the US, farmers are also in the market to sell.
Soyabean, crude palm oil
Chicago Board of Trade soyabean for delivery in May ruled at $13.42 a bushel. Crude palm oil contracts for delivery in May pared gains after a higher opening to quote at 2,717 ringgit or $822 a tonne.
Weather concerns, heat in Brazil and forecast of cold spell returning to the US, are likely to drive up corn (industrial maize) and wheat prices.
CBOT wheat for delivery in May ruled firm at $6.13 a bushel and corn for he same month at $4.60 a bushel.