Gold prices on domestic spot and futures markets are likely to rule firm, though they are likely to come under pressure from a strengthening dollar.
A recovery in the US economy and data, due later in the day and which could point to where the economy is heading, will keep the market quiet for a major part of the day.
Adding to concerns of market players would be the drop in gold holdings in SPDR Trust, the world’s largest bullion-backed exchange traded fund, to below 800 tonnes. The trust said that during the weekend its holdings dropped to 795.61 tonnes, an indication that investors are looking at every available opportunity to book profits.
Physical demand in Asia, too, is seen weakening at these prices as also in India where the Rs 30,000-for-10gm-mark is seen an opportunity to sell.
German business climate
Later in the day, Germany’s business climate findings, US national activity index and PMI data will determine how the yellow metal will move over the next few days.
The domestic market will also eye currency movements since a strong dollar against the rupee makes imports of gold, crude oil and vegetable oils dearer.
Spot gold
In early Asian trading, spot gold in Singapore traded lower at $1,320.46 an ounce and gold futures maturing for delivery in April at $1,321.20.
In the domestic spot market, pure gold (99.5% purity) on NCDEX closed at Rs 30,560 for 10 gm during the weekend.
Gold futures for delivery in April on MCX and NCDEX are likely to trade below Rs 30,000.
The oils and oilseeds market will rule steady to firm as China continues to buy US soyabean and the expected cancellation of the cargoes not happening. Dryness in key Brazilian growing area is also providing support.
Soyabean futures
Chicago Board of Trade soyabean futures maturing for delivery in May were up at $13.70 a bushel. Crude palm oil futures for the same month were up at 2,766 ringgit or $838.50 a tonne on Bursa Malaysia Derivatives Exchange.
Easing of weather concerns for wheat and lower than expected exports of US corn (industrial maize) will keep both these grains pinned.
CBOT corn for delivery in May traded lower at $4.58 a bushel and wheat for the same month at $6.03 a bushel.