Agencies reported a key decision maker as saying that the US Federal Reserve will begin cutting its $85-billion-a-month stimulus package before the year-end.
Elsewhere, US consumer confidence dropped as also rise in US home prices slowing in July.
Durable goods, home sales data
Data on US durable goods orders and new home sales later in the day could shed some light on which way the economy is heading and probably, provide some direction to the yellow metal.
Kharif crop forecast
The Indian Farm Ministry has said that the kharif or summer crop this year will be the highest over the last five years.
It remains to be seen see how the rural population reacts to a higher income, coming in at least from higher support price for foodgrains and major oilseeds. Most probably, this factor could cushion any steep fall in gold, for now.
Spot gold, gold futures
In early Asian trading, spot gold ruled at $1,324.74 an ounce and gold futures maturing in December at $1,324.90.
In the domestic market on Wednesday, gold for jewellery (99.5 per cent purity) edged marginally up at Rs 29,820 for 10 gm and pure gold (99.9 per cent purity) to Rs 29,970.
On MCX, October gold contracts could rule between Rs 29,500 and Rs 30,000.
Rupee Vs dollar
In the Indian context, the rupee’s movement against the dollar could also have a role to play since a stronger Indian currency makes the import of gold, crude oil and vegetable oils costlier.
Having dropped over the last four sessions, crude oil could edge higher on Wednesday, especially on speculation that US crude stockpiles could have dropped. Data on the stocks are expected later in the day.
Crude oil prices
Brent crude contract maturing in November was up at $108.78 a barrel and West Texas Intermediate for the same month at $103.27.
The oils and oilseeds complex is likely to head north on threat of frost in the US Midwest region besides bets that rains in that region are not enough to boost the crop. A rise on soyameal prices, too, could help the complex scale up.
Soyabean, crude palm oil
Chicago Board of Trade soyabean November contracts rose to $13.18 a bushel. Crude palm oil December contracts on Bursa Malaysia Derivatives Exchange opened higher at 2,310 ringgit or $716.50 a tonne.
Wheat, corn prices
With wheat prices rising above the 50-day moving average, technically they are likely to rise. Fundamentally, China has increased its import of US wheat and inspections for its exports are also higher.
On the other hand, Argentina, going through a dry period, could see frost in the main-growing area, threatening the standing crop further.
Corn (industrial maize), on the other hand, could drop as a higher harvest looms.
CBOT wheat for delivery in December rose to $6.59 a bushel and corn for delivery the same month to $4.49 a bushel.
Courtesy: The Hindu Business Line