Indian gold and silver futures gained strength from firmer world prices early on Tuesday, while sugar contracts fell on expectations of a drop in domestic prices due to adequate stocks, brokers said. Soy futures traded in a narrow range because of sluggish demand for soyoil and soymeal in the domestic market, they said. At 0709 GMT, May gold at the National Commodity and Derivatives Exchange (NCDEX) traded at 6,197 rupees per 10 grams, up 3 rupees from the previous close.
June gold at the Multi Commodity Exchange (MCX) increased slightly to 6,178 rupees from 6,177 rupees.
"Bullion futures have been reflecting international prices but gold appears in a bearish mode," said Aditya Jhaveri of Basic Commodities. "People are waiting for US data and a clear trend will emerge in the evening."
Gold was stuck in a narrow range in Asia and investors were wary of buying ahead of US producer and consumer price reports for March in case they show signs of building inflation pressure, which could raise the chance of more aggressive US interest rate hikes.
The reports are due on Tuesday and Wednesday.
Rising interest rates would be expected to boost the dollar and pressure the price of gold, which is likely to trade in a range of $420 to $430 an ounce this week, dealers said.
Spot gold was trading at $427.35/$428.10, up from $426.90/427.70 an ounce last quoted in New York on Monday, when gold rose more than $2 as the dollar declined.
Brokers said Indian silver futures might increase as world prices were seen rising to $7.10 an ounce from $7.04/$7.07 at 0709 GMT. Spot silver was last quoted at $7.01/$7.04 in the US market.
"Spot soymeal market is very bad and soyoil demand is also not showing up. There is no current in the market that's why the market is trading in a narrow range," a trader said.
The market was also taking its cue from foreign markets, brokers said. At the lunch break, Bursa Malaysia Derivatives' benchmark third-month palm oil contract, July, settled flat at 1,426 ringgit ($375.26) a tonne, after trading in a tight band of 5 ringgit through the morning.
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