MCX MORNING UPDATES
BULLION – Bullion counter may trade with weak bias as gold prices inched lower on Friday, after dropping more than 2% in the previous session, as investors were driven to riskier assets encouraged by stronger U.S. economic data and hopes of a thaw in the U.S.- China trade tensions. Prices also registered their biggest one-day percentage decline in nearly three years on Thursday. U.S. services sector activity accelerated in August and private employers boosted hiring, suggesting the economy continued to grow at a moderate pace despite trade tensions, which have stoked financial market fears of a recession. China and the United States on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth. Trade tensions between the United States and China are set to knock half a percentage point off of global growth by next year, France’s finance minister said in an interview published on Thursday.
ENERGY- Crude oil may trade with sideways bias. Oil prices edged higher on Friday, with crude benchmarks poised for multi-week gains amid a sharp drawdown in U.S. crude inventories, while trade tensions eased after Washington and Beijing agreed to hold highlevel talks next month. U.S. crude and product inventories fell last week, with crude drawing down for a third consecutive week despite a jump in imports, the Energy Information Administration (EIA) said. Crude stocks dropped 4.8 million barrels, nearly double analysts expectations, to 423 million barrels, their lowest since October 2018. Oil prices on Thursday soared more than 2% after the EIA report, although they gradually trimmed gains as investors are not entirely convinced that the Sino-U.S. trade talks will yield results. U.S. natural gas futures slipped from a seven-week high on Thursday following the release of a bigger than expected weekly storage build and a projected decline in the amount of gas flowing to liquefied natural gas (LNG) export plants.
BASE METAL – Base metals may trade with dip lower on profit booking. London copper was rising 2.7% so far this week, its best since March, while Shanghai copper rose as progress after China and the United States agreed to hold high level trade talks, reviving hopes for an end to a prolonged dispute. China’s iron ore futures edged lower to snap a six-session rally on Friday, but they were in line for their biggest weekly jump since mid-June, fuelled by firm demand from mills. Indonesia government announced that miners can seek new export quotas, which will be valid until the end of the year. This is likely to result in a surge in exports of nickel ore ahead of the planned ban on 1 January 2020. Indonesia on Thursday released a decree allowing new exports quotas to be issued but only for validation until the end of this year.
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