MCX MORNING UPDATE
BULLION – Bullion counter may witness range bound movement .Gold markets rallied a bit during the trading session on New Year Eve, reaching towards the $1525 level, but stalling a bit as Donald Trump has announced that he will be signing a trade deal with the Chinese on January 15. Central banks are also buying more gold and have flipped from tightening to loosening monetary policy, pushing interest rates and bond yields down and making non-yielding precious metals more attractive to investors. China’s central bank said on Wednesday it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.91 billion) in funds to shore up the slowing economy.
ENERGY – Crude oil may remain on higher side as oil prices rose on the first trading day of 2020 as warming trade relations between the United States and China eased demand concerns, and rising tensions in the Middle East raised worries about supply. Geopolitical risks remain in the Middle East after U.S air strikes against the Iran-backed Katib Hezbollah militia group over the weekend. Protesters, angry at the air strikes, stormed the U.S. Embassy in Baghdad on Wednesday, although they withdrew after U.S. deployed extra troops. January also marks the start of the deeper output cuts by OPEC and its partners, including Russia. OPEC and its allies have agreed to cut a further of 500,000 barrels per day (bpd) from Jan. 1, on top of their previous cut of 1.2 million bpd that started on Jan. 1 a year ago. A fall in U.S. crude inventories last week also supported prices.
BASE METAL – Base metals may trade with sideways bias. London copper started the year on a positive note on Thursday, rising as much as 0.8% after U.S. President Donald Trump set a date for signing a Phase 1 trade deal with China, top producer Chile’s output fell and Beijing cut banks’ reserve requirements. Chilean mining activity fell 7.1% in November, government data showed on Tuesday, plagued in part by operational issues at major mines during a tumultuous month of protests, road and port blockades and worker strikes in the South American nation. The world’s top copper producer reported that production of the metal fell 6.7% in November from the same month a year earlier to 504,366 tonnes. Chile’s vast copper mines largely maintained production and kept operations running normally through early November, amid the brunt of unrest, though there have been isolated incidents at some operations and uncertainty lingers.
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