MCX MORNING UPDATE
Bullion counter may witness strong upside momentum on safe haven demand amid Middle East tensions. Gold soared to its highest in nearly seven years on Monday, as intensifying tensions in the Middle East drove investors towards the safe-haven metal, while palladium surpassed $2,000-level to hit a record high. Iraq on Sunday called for U.S. and other foreign troops to leave amid a growing backlash against the U.S. killing of a top Iranian military commander that has heightened fears of a wider Middle East conflict. U.S. President Donald Trump threatened sanctions against Baghdad on Sunday for the move, and said if troops did leave, Baghdad would have to pay Washington for the cost of the air base there. Iran announced on Sunday it would abandon limitations on enriching uranium, taking a further step back from commitments to a 2015 nuclear deal with six major powers.
Crude oil may remain on higher side as oil prices shot more than 2% higher on Monday, with Brent rising above $70 a barrel, after U.S. President Donald Trump issued a threat to impose sanctions on Iraq amid escalating tensions with Iran in the Middle East. The gains extended Friday’s more-than-3% surge after a U.S. air strike in Iraq killed top Iranian commander Qassem Soleimani on Friday. The killing has heightened concerns of a widening Middle East conflict that could disrupt oil supplies from a region that accounts for nearly half of the world’s oil production. On Sunday President Trump threatened to impose sanctions on Iraq, the second largest producer among the Organization of the Petroleum Exporting Countries (OPEC), if U.S.
BASE METAL –
Base metals may trade with upside bias. The People’s Bank of China last week reduced the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.84 billion) in funds to shore up the slowing economy. London copper prices bounced back on Monday as policy easing by China the world’s biggest consumer of industrial metals – and the soon-to-be signed trade deal between Washington and Beijing boosted prospects of higher demand for the ductile metal. A Chinese trade delegation is planning to travel to Washington on Jan. 13 for the signing of the U.S.-China Phase 1 trade deal, the South China Morning Post reported on Sunday, citing a source briefed on the matter.
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