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The Syrian imbroglio will hold sway over markets on Wednesday as gold prices on the spot and futures market are likely to rule firm.
In the Indian context, the rupee’s movement will also be a factor since a weaker Indian currency against the dollar makes import of gold, crude oil and vegetable oils costlier.
US action against Syria
Speculation that the US is preparing for a military action against Syria is pushing gold higher since investors are looking for a haven to secure their savings.
Britain and France also seem to be supporting the US move, raising geo-political tensions across the globe. This comes on the heels of Syria attacking its rebels with chemical weapons last week.
Any further hardening of stance from both sides will fuel further rally in gold as the crisis could grip other parts of West Asia.
Spot gold, gold futures
In early Asian trade, spot gold ruled steady at $1,417.88 an ounce and gold futures maturing in December slipped marginally to $1,417.40.
In the domestic market, gold for jewellery (99.5 per cent purity) rose to a record Rs 32,585 for 10 gm and pure gold (99.9 per cent purity) to Rs 32,730.
On MCX, October contracts could sway between Rs 33,200 and Rs 33,350.
Holdings in exchange-traded fund
The rise in gold led to investors raising their holdings in exchange-trade funds. SPDR Gold Trust, world’s biggest gold exchange-traded fund, reported that its holdings were up at 921.03 tonnes.
Crude oil
The Syrian crisis is also fanning a rise in crude prices that could increase in the domestic futures market too.
Brent crude for delivery in October rose to $116.90 a barrel and West Texas Intermediate for the same month to $111.13.
Oils, oilseeds
The oils and oilseeds complex could pause for breather on Wednesday after the rise seen in the last couple of sessions.
In the US, forecasts of a cooler weather during the week-end and perhaps a possibility of rain cooled soyabean on the Chicago Board of Trade (CBOT). But traders are unlikely to be convinced until rainfall actually lands in the growing areas.
On the other hand, the Indian soyabean crop is suffering from excess rains and unless the crop gets required sunshine, the advantage of a record plantings may be lost.
The Indian festival season and higher palm oil exports from Malaysia are other bullish factors that could stall any sharp fall in prices.
Soyabean, crude palm oil
On CBOT, soyabean for delivery in November ruled at $13.81 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in November were up at 2,456 ringgit or $737 a tonne.
The grains complex could also cool a bit on the US weather outlook, though the prospect of the European crop being affected could support an uptrend.
CBOT corn for delivery in December ruled at $4.90 a bushel and wheat December contracts at $6.67 a bushel.
Natural rubber
Natural rubber could be caught range-bound between a declining yen and rising prices of crude oil from which its alternative synthetic rubber is derived.
On the Tokyo Commodity Exchange, rubber contracts maturing in January fell to 271.7 yen or Rs 185 a kg.
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