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Gold is likely to be range-bound on spot and futures market with a negative bias as global prices edged lower.
The decision of India, the largest gold importer, to raise gold duty by two percentage points to eight per cent is likely to be reflected in domestic prices. But the move is dragging prices globally.
The other bearish factor for gold is speculation that the US economy could force the Federal Reserve to pare stimulus package.
In early Asian trade at Singapore, spot gold quoted at $1,401.50 an ounce, while gold futures for maturing in August ruled at $1,400.50.
In the domestic market on Wednesday, gold for jewellery (99.5% purity) closed at Rs 27,105 for 10 gm, while pure gold (99.9% purity) ended at Rs 27,230.
On MCX, gold August contracts are likely to swing between Rs 26,900 and Rs 27,200.
The currency factor will also count since a higher dollar against the Indian rupee will result in imports of gold, crude oil and vegetable oils turning costlier.
Crude Oil
Crude oil will likely gain with inventories in the US dropping the highest so far this year.
Brent crude oil for delivery in July fell to $102.85 a barrel, while West Texas Intermediate for delivery the same month dropped to $93.77.
Oils and Oilseeds
The oils and oilseeds complex could heat up on fears that increasing demand for animal feed could reduce supplies in the US before harvest. Chinese buying will also aid the trend, while speculation over Malaysian palm oil stocks dropping is another factor.
On Chicago Board of Trade (CBOT), soyabean for delivery in July increased to $15.25 a bushel, while on Bursa Malaysia Derivatives Exchange, crude palm oil for delivery in August slipped to 2,397 ringgit or $775 a tonne.
Grain complex
The grain complex could come under pressure on talks that global supplies will be higher this year and enough to meet any exigency. This has begun to discount the effects of rain in the US, where planting has been affected. Similarly, fears over US winter wheat have also receded.
Corn for December delivery on CBOT quoted at $5.43 a bushel, while wheat contracts for delivery in July $7.02 a bushel.
Rubber
Rubber is headed south as the Japanese yen hit a one-month high against the dollar.
On Tokyo Commodity Exchange, rubber futures maturing in November fell to 252.5 yen or Rs 142 a kg.
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