MCX MORNING UPDATE
BULLION – Bullion counter may trade with positive bias gold prices edged higher on Thursday after the U.S. Federal Reserve cut interest rates as expected, even as the central bank dropped a previous reference in its statement that signalled future rate cuts. The U.S. central bank on Wednesday cut interest rates for the third time this year to help sustain U.S. growth despite a slowdown in other parts of the world, but signalled there would be no further reductions unless the economy takes a turn for the worse. Gold prices gained modestly after the statement, but turned negative soon after Fed Chair Jerome Powell said in a news conference that the U.S. economy was doing well, and likely to continue to do so under the current stance of monetary policy. A more than 15-month trade spat between China and the United States has roiled financial markets and stirred global recessionary fears. Elsewhere, gold consumption in China, the world top producer and consumer of the precious metal, fell 9.58% year-on-year to 768.31 tonnein the first nine months of 2019.
ENERGY- Crude oil may witness profit booking at higher levels as oil prices fell for a fourth day on Wednesday, extending losses after a surge in U.S. inventories surprised investors, overshadowing an interest rate cut by the Federal Reserve. The Federal Reserve on Wednesday cut interest rates for a third time this year and signalled it plans no further cuts unless the economy takes a turn for the worse. Crude inventories rose 5.7 million barrels in the week to Oct. 25, the U.S. Energy Information Administration said on Wednesday. On Tuesday, the American Petroleum Institute, an industry group, had reported a 708,000-barrel decline in inventories, raising hopes that official figures would also show a drop. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said. Distillate stockpiles, which include diesel and heating oil, declined for a sixth week in a row, falling 1 million barrels last week, versus expectations for a 2.4 million-barrel drop, the EIA data showed.
BASE METAL – Base metals may trade with mixed bias. Most industrial metals fell on Thursday due to weak manufacturing data from major consumer China, and amid worries about further delays in a Sino-U.S. trade deal. Factory activity in China shrank for the sixth straight month in October, official data showed, pointing to further pressure on its manufacturers as they grapple with the weakest economic growth in nearly 30 years. Copper (Nov) may test 441 while taking resistance near 445. Chile manufacturing production dropped 1.5% in September, compared with the same month the previous year amid a 5.4% decrease in mining production. Peru has given an important green light for Southern Copper Corp much-delayed Tia Maria copper mine, but the government cautioned it would not move ahead with the project without the right social and environmental conditions being met.
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