MCX MORNING UPDATE
Bullion counter may trade on weaker path. Gold steadied on Monday after paring losses as weak U.S. manufacturing data rekindled worries about a slowing economy, while palladium exceeded $1,860 per ounce in its week-long surge to new all-time highs on a supply crunch. His notion is that the U.S. Federal Reserve is done cutting (interest rates) for now and well need to see a trend in weaker data through early 2020 to convince the market that were going to get more cuts. Until then, theres no real impetus to see gold rally. The Fed cut rates three times this year and has one more meeting on Dec.10-11. However, investors now see the Fed keeping interest rates unchanged until at least mid-2020. Markets also awaited clarity on an interim U.S.-China trade deal.
Crude oil may witness some bounce back assoil prices rose for a second day on Tuesday as Saudi Arabia, the de facto OPEC leader and the worlds biggest oil exporter, is pushing producers to deepen a supply cut agreement when suppliers meet this week, potentially lowering supply in 2020. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, are discussing a plan to increase its existing 1.2 million barrels per day (bpd) supply cut by 400,000 bpd and extend the pact until June, two sources familiar with the matter said. OPEC ministers will meet in Vienna on Thursday and the wider OPEC+ group will gather on Friday. Concerns about the inability of the United States and China, the worlds two biggest oil users, to come to a preliminary agreement to resolve their 17-month trade dispute also weighed on oil prices, along with discouraging U.S. economic data.
BASE METAL –
Base metals may trade with sideways to upside bias. London copper prices slid on Tuesday, with most industrial metals coming under pressure, as manufacturing data from China failed to assuage lingering doubts of an economic slowdown. Zinc sank to its lowest in nearly three months on Monday and other industrial metals also posted losses as investors doubted that upbeat manufacturing data in China pointed to an economic recovery. The net speculative short position of LME zinc has risen to 14.7% of open interest, a level not seen since late September. Le Norsk Hydro, one of the worlds biggest aluminum producers, plans to cut production by 20% at its majority-owned Slovalco plant in Slovakia, citing a weakening market. The weak aluminum market has led to rising inventories. On-warrant LME stocks, material not earmarked for delivery, reached 1,114,650 tonnes, the highest since Feb. 22.
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