MCX MORNING UPDATES
BULLION – Bullion counter may remain on sideways to negative path .Gold prices held steady on Tuesday after posting their biggest daily decline in a month in the previous session, plummeting below a key psychological level of $1,500 an ounce. Market sentiment is likely to remain positive as bond yields are rising globally and the U.S. Treasury yield curve is no longer flashing signs of a recession. The focus shifts to U.S. Federal Reserve meeting minutes due on Wednesday. Traders will also watch the Fed Jackson Hole seminar and a Group of Seven summit this weekend for clues on what additional steps policymakers will take to bolster growth. Hopes for more stimulus are rising after reports that Germany is prepared to increase fiscal spending, and after the China central bank unveiled a key interest rate reform to lower corporate borrowing costs and support a slowing economy. The U.S. dollar held near a three-week high on Tuesday, as expectations of fresh global stimulus, and an improvement in appetite for riskier assets lifted yields on U.S. government bonds..
ENERGY- Crude oil may trade with mixed path .Crude oil prices slipped on Tuesday, but losses were limited as equity markets rallied and as traders hoped Sino-U.S. trade tensions would ease. A rally in equity markets around the world from growing expectations that global economies would take action to counteract slowing growth also supported oil prices, which often follow stocks. China’s central bank unveiled interest rate reforms which are expected to lower corporate borrowing costs, while Germany’s right-left coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession. Still, prices were weighed down by a report from the Organization of the Petroleum Exporting Countries (OPEC) that stoked concerns about growth in oil demand. OPEC cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020. U.S. natural gas futures settled slightly higher on Monday, having earlier fallen as much as 3% on expectations of higher gas production and cooler temperatures, as ongoing hot weather lifted prices.
BASE METAL – Base metals may trade on positive path. Top global miner BHP Group said on Tuesday the U.S.-China trade war is not yet affecting demand for its commodities including copper. Shanghai aluminium hit its highest level in nine months on Tuesday, tracking gains in London in the previous session, as fears of a shortage following a flooding in China added to gains from China measures to boost the economy. China Hongqiao Group, the world biggest aluminium producer, said last week it was operating as normal after a typhoon lashed its home province, but investors remain concerned about potential supply disruption. Aluminium inventories in warehouses tracked by the Shanghai Futures Exchange fell to their lowest since April 2017 at 387,663 tonnes, while LME inventories fell to their lowest since July 23.
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