Holiday mood may see gold ruling flat

Chennai-India (Dec 26)  Gold prices in the domestic spot and futures market are likely to rule flat with the global market caught in a holiday mood for Christmas and the New Year.

However, prices may trade with an upper bias until the US markets open later in the day. Some physical buying is seen in Asia with investors, particularly Chinese, seeing value at current prices.

Economic growth

However, going forward the scenario is not rosy for gold with all economic indicators pointing to growth which could mean that investors will be now looking for other assets to raise their income. The growth also ends fears that investments in other assets, particularly stocks, may not be beneficial.

Fed stimulus taper

The US Federal Reserve’s move to begin paring its $85 billion-a-month stimulus programme from next month is also a drag on the yellow metal.

In early Asian trade, spot gold rose marginally to $1206.08 an ounce and gold futures maturing for delivery in February to $1,205.30.

In the domestic market on Tuesday, NCDEX spot gold closed at Rs 29,410 for 10 gm. In the domestic futures market, MCX and NCDEX contracts for February delivery could range between Rs 28,000 and Rs 28,500.

Crude oil

Crude oil will head north on the back of strong indications of economic growth which would lead to higher demand.

Brent crude contracts for delivery in February rose to $112.10 a barrel and US crude for the same month to $99.49.