Gold set to shine as US Fed defers decision on stimulus: Chennai, Sept 19: With the US Federal Reserve deciding not to take any decision on cutting the $85 billion-a-month stimulus programme, gold prices on domestic and spot markets are set to gain. Overnight, the yellow metal jumped over four per cent and the trend could be duplicated in India too. Fed Reserve stimulus programme: The Federal Open Market Committee (FOMC) on Wednesday decided to wait for more evidence that the growth in the economy will be sustained before adjusting the “pace of its purchases”. Fed Chairman Ben Bernanke said that the bond purchase programme, to inject money in the economy, is not on a “preset course”. Money will mean inflation and investors, during such times, will look to gold as a hedge against price rise. Further clues to where the economy is headed will come tonight with the weekly US job claims and data on home sales. Gold prices: In early Asian trade, spot gold ruled at $1,365.21 an ounce and gold futures maturing in December quoted at $1,364.90. The Mumbai bullion market was closed for the Ganesh immersion ceremony on Wednesday. On MCX, gold October contracts could rise to as high at Rs 30,100. The rise in gold price will also depend on how the currency market behaves since any rise in the rupee against the dollar will make imports of commodities such as gold, crude oil and vegetable oils cheaper. Crude stockpiles: Crude oil will also jump on the US Fed move to put off tapering its stimulus programme. Stockpiles at one-year low will also aid the rise. Brent crude contracts expiring in November rose to $111.06 a barrel and West Texas Intermediate for the same month to $108.72. Exports of over three million tonnes of soyabean to China and some other undeclared destinations will buoy the oils and oilseeds counter. China is one of the main buyer to make meal for its livestock. Also, they have been battered by the bears over the last couple of sessions that value buying could rear its head. Soyabean, crude palm oil: Chicago Board of Trade soyabean contract maturing in November rose to $13.53 a bushel. Crude palm oil December contracts on Bursa Malaysia Derivatives Exchange opened lower at 2,314 ringgit or $718.50 a tonne. The grain complex could also head north as export demand for wheat and projections of lower plantings in corn (industrial maize). CBOT wheat contracts maturing in December rose to $6.47 a bushel and corn contracts for the same month to $4.57 a bushel.
Posted on: Thu, 19 Sep 2013 04:20:36 +0000
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