Gold prices will continue to be under pressure on domestic spot and futures market on the back of a strong dollar and US data pointing to green-shoots in the economy.
US jobless claim dropped last week and its Mid-west region reported better business activities last month - indications of the economy recovering. In Asia, data showed that Chinese factory output had increased to an 18-month high.
The US developments are in sync with the Federal Reserve’s observation that there are signs of the economy strengthening, giving rise to speculation that the $85 billion a month stimulus package could be pruned earlier than expected.
Dhanteras and Kharif crop arrivals
In India, Dhanteras on Friday and Diwali during the weekend could mean tapering of demand for the precious metal. Weddings will be the only factor that can drive gold amidst rains affecting harvest and quality of the summer or kharif crops.
This could also possibly bring down the premium that gold enjoys in the Indian market due to problems in importing the yellow metal.
Spot gold, gold futures
In Asian trade, spot gold ruled at $1,324.35 an ounce and gold futures maturing in December at $1,324.
In the domestic market on Thursday, gold for jewellery (99.5% purity) dropped to Rs 30,680 for 10 gm and pure gold (99.9% purity) to Rs 30,830.
On MCX, gold December contracts could trade between Rs 30,000 and Rs 30,500.
Crude oil
Crude oil ruled near lows seen in June despite signs of economic recovery. Easing of geo-political tensions and higher stockpiles in the US are keeping it on leash. It could continue to rule side-ways on Friday.
Brent crude for delivery in December ruled at $108.08 a barrel and US crude contracts for the same month at $96.36.
Soyabean arrivals
Improved weather conditions leading to better plantings of soyabean in South America and progress in arrivals of Indian kharif or summer oilseeds could begin to put pressure on the oils and oilseeds market. Malaysia palm oil, which had topped $800-a-tonne-mark this week, could witness profit booking. Palm oil had gained on reports of production in plantations being affected by rains.
Chicago Board of Trade soyabean for delivery in January fell to $12.69 a bushel. Crude palm oil contracts expiring in January opened lower at 2,587 ringgit or $817 a tonne.
Wheat, corn prices
The grain complex will likely head south as the International Grains Council has projected global wheat production higher at 696 million tonnes and carry-over stocks are likely to be higher at 183 million tonnes.
Rains in China that could boost winter sowing are another bearish factor.
Corn (industrial maize), on the other hand, is under pressure on higher global production.
Wheat on CBOT for delivery in December slipped to $6.67 a bushel and corn contracts for December fell to $4.28 a bushel.
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