MCX MORNING UPDATE
BULLION – Bullion counter may trade on sideways to upside bias. Gold steadied in a tight range on Tuesday as investors adopted a cautious approach ahead of a crucial Brexit vote, while focus shifted to the U.S. Federal Reserve stance on interest rate cuts. British Prime Minister Boris Johnson faces two pivotal votes in parliament that will decide whether he can deliver on his pledge to lead Britain out of the EU in nine days time. Investors are also awaiting the Federal Reserve month-end monetary policy meeting for further clarity on rates cuts this year. Federal fund futures imply that traders see an 89% chance for a 25 basis-point rate cut by the U.S. central bank in its month-end monetary policy meeting. However, amid mixed signals from Fed policymakers it is unclear if they, overall, will support a cut. Reflecting sentiment, holdings of gold in exchange traded funds tracked by Retinitis have jumped to their highest since mid2013.
ENERGY- Oil resumed its decline on indications U.S. crude inventories expanded for a sixth week, the longest run of gains in almost a year. Futures fell 0.7% in New York, paring some of Tuesday 1.8% gain that was driven by a report that OPEC and its allies will consider deepening production cuts when they meet in December. The American Petroleum Institute reported crude stockpiles rose by 4.45 million. Oil has slumped about 18% from an April peak as the U.S.-China trade war dented demand and as global supplies swelled. The Organization of Petroleum Exporting Countries and its partners are concerned about the demand outlook next year. OPEC and its allies plan to consider whether to deepen cuts to crude supply when they next meet in December due to worries about weak demand growth in 2020, sources from the oil-producing club said.
BASE METAL – Base metals may trade with sideways bias. Workers at Chile state-owned Codelco, the world largest copper producer, will join a general strike planned for Wednesday amid protests that have shaken the country. London nickel fell on Wednesday, after a short rebound in the previous session, while Shanghai nickel rose tracking overnight gains in London. The most-traded nickel contracts on the Shanghai Futures Exchange (ShFE) rose 2.1% to 128,930 yuan ($18,195.80) a tonne, tracking overnight gains in London. The differences between LME cash and nickel three month contracts flipped to a discount this week, after holding in premium zone for more than two months, indicating supply tightness has eased. LME nickel stocks fell to 87,132 tonnes, hovering around their lowest since November 2011. Global demand for nickel is expected to increase to 2.52 million tonnes in 2020 versus 2.45 million tonnes in 2019, while global output of nickel is expected to increase to 2.48 million tonnes in 2020 versus 2.37 million to nest in 2019, the International Nickel Study Group said.
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