MCX MORNING UPDATE
Bullion counter can witness short covering after recent fall as gold prices inched up on Wednesday after a sharp drop in the previous session, as a virus outbreak from China spread further and the death toll neared 500, although risk appetite was buoyed by Beijing’s efforts to mitigate its economic impact. The coronavirus outbreak claimed its first life in Hong Kong, compounding the international financial centre’s problems after anti-government protests, and Macau, the world’s biggest gambling playground, urged casinos to shut their doors. Gold (Apr) can recover towards 40300 while taking support near 40000 while silver (Mar) can test 46000 while taking support near 45700. India’s gold imports in January plunged 48% from a year earlier to their lowest in 4 months as a rally in local prices near record highs prompted buyers to curtail purchases, a government source said on Tuesday. The White House’s top economic adviser said on Tuesday that the coronavirus would delay a surge in U.S. exports to China expected from the Phase 1 trade deal set to take effect later this month. Chinese policymakers are readying measures to support an economy jolted by the outbreak that is expected to have a devastating impact on first-quarter growth, policy sources said.
Crude oil may remain on sideways to upside path as oil prices rose on Wednesday, reversing out of a 1% slump in the previous session, boosted by producers weighing further output cuts to counter a potential squeeze on global oil demand resulting from China’s fast-spreading coronavirus. Crude oil can move towards 3650 while taking support near 3550. The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, a group known as OPEC+, weighed the impact on global oil demand, and economic growth, of the coronavirus outbreak at a meeting on Tuesday, hearing from China’s envoy to the United Nations in Vienna. Producers are weighing further output cuts and moving a planned policy meeting to February rather than March. China, the world’s biggest crude oil importer, has been the main driver of global energy demand growth in recent years. Natural gas can recover towards 137 while taking support near 131. U.S. natural gas futures rose on Tuesday from a near four-year low a day ago on forecasts for slightly cooler weather in mid-February than earlier expected. Meteorologists projected weather in the U.S. Lower 48 states will remain near-normal through Feb. 19. That is cooler than Monday’s outlook for the week of Feb. 16.
BASE METAL –
Base metals may trade with positive bias. China’s central bank said its huge liquidity injections through open market operations this week showed its determination to stabilise financial market expectations and restore market confidence. The People’s Bank of China (PBOC) injected a total of 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday.
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