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Gold prices in the domestic spot and futures markets are likely to be range-bound with a bias towards the downside in line with the global market.
As it has been happening this year, the yellow metal once again is facing selling pressure. Investors are opting to sell at every rise and Monday’s over one per cent rise in the precious metal has given them an opportunity to cash in their investments.
The market seems bent on hammering gold and that is one of the reasons why even data showing lower than expected growth are unable to drive it higher. The rise in gold holdings in exchange-traded funds did not happen on Monday as they were unchanged at 911.13 tonnes on SPDR Trust, world’s largest for gold.
In India, the plunging rupee could have an impact on gold’s upward movement as any decline in its value against the dollar results in imports of gold, crude oil and vegetable oils turning dearer.
Key events that could have some bearing on gold market on Tuesday are UK inflation for July, Euro Zone industrial production and US July retail sales.
In Singapore, spot gold snapped its four-day rise to rule at $1,334.81 an ounce and gold futures maturing in December at $1,334.50.
In the domestic market on Monday, gold for jewellery (99.5% purity) ended higher at Rs 29,250 for 10 gm and pure gold (99.9% purity) at Rs 29,400.
Gold October contracts on MCX are likely to rule firm above Rs 28,000.
Crude Oil
Crude oil is set to gain on fears that US stockpiles have dropped following improved demand.
Brent crude oil futures maturing in September rose to $109.02 a barrel and West Texas Intermediate crude contracts for the same month to $106.25.
Oils and Oilseeds
The oils and oilseeds complex is set to heat up on the US Department of Agriculture report showing lower than expected soyabean production this year. Excess rains in May and June affected sowing and cut yields. The USDA said that soyabean harvest could be 3.26 million bushels against earlier estimates of 3.42 billion bushels and last year’s 3.02 bushels.
On Chicago Board of Trade, soyabean contracts maturing in November surged to $12.33 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil October contracts opened higher at 2,293 ringgit or $705 a tonne.
Grains complex
A similar USDA forecast of damage to corn (industrial maize) from the rain will help the grains complex rule firm. Corn production is now forecast at 13.76 bushels against initial estimates of 13.95 bushes. Wheat is also set to rise in sympathy with corn.
CBOT corn contracts maturing in December rose to $4.64 a bushel and wheat due for delivery next month to $6.51 a bushel.
Rubber complex
Natural rubber futures are likely to be sapped on investor sales, while spot prices could come under pressure as arrivals pick up with rains clearing in growing areas of Kerala.
On the Tokyo Commodity Exchange, rubber futures maturing in January dropped to 264.4 yen or Rs 264.4 or Rs 166 a kg
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