MCX MORNING UPDATE
Bullion counter may trade on weaker path. Gold prices fell after hitting their highest in more than a week on Monday, as stocks gained on better-than-expected China factory data and the greenback strengthened, despite fresh uncertainty over a US-China trade truce. Bullion prices, however, failed to stay afloat despite news website Axios’ report that a trade agreement between United States and China was now “stalled because of Hong Kong legislation”. Beijing’s top priority in any “phase one” trade deal with the United States is the removal of existing tariffs on Chinese goods, China’s Global Times newspaper reported on Sunday. Gold was sold at a premium last week in India as a dip in prices prompted purchases of the precious metal. The US government may expand its power to stop more foreign shipments of products with US technology to China’s Huawei, amid frustration the company’s blacklisting has failed to cut off supplies to the world’s largest telecoms equipment maker, two sources said.
Crude oil may witness some bounce back after sharp fall in last session. Oil prices rose more than 1% on Monday as signs of rising manufacturing activity in China pointed to increasing fuel demand and hints that OPEC may deepen output cuts at its meeting this week indicated supply may tighten next year. On Friday, WTI futures settled 5.1% lower amid reduced volumes because of last week Thanksgiving Day holiday while Brent plunged 4.4%. Prices fell on concerns that talks to end the trade war between the United States and China, the world two biggest oil users, would be disrupted by U.S. support for protestors in Hong Kong. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, are expected to at least extend existing output cuts to June 2020 when they meet this week. OPEC ministers will meet in Vienna on Dec. 5 and the wider OPEC+ group will meet on Dec. 6 to make a decision on the current agreement.
BASE METAL –
Base metals may trade with sideways to upside bias. London copper prices bounced back on Monday, with the market supported by factory activity returning to growth in top industrial metals consumer China. Factory activity in China unexpectedly returned to growth in November for the first time in seven months, as domestic demand picked up on Beijing accelerated stimulus measures to steady growth. Beijing top priority in any phase one trade deal with the United States is the removal of existing tariffs on Chinese goods, China Global Times newspaper reported on Sunday, amid uncertainty on whether the two sides can end a 17-month trade war that has depressed global growth. But gains were slight, and export demand remained sluggish. More U.S. tariffs are looming within weeks and Beijing and Washington are still haggling over the first phase of a trade deal.
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