MCX MORNING UPDATE
Bullion counter may witness further profit booking as gold prices were steady on Thursday, retreating from the near seven-year peak hit in the previous session, as a softening rhetoric by the United States and Iran allayed concerns of a larger military conflict. President Donald Trump said on Wednesday the United States did not necessarily have to respond militarily to Iran’s attack on military bases housing U.S. troops in Iraq. Iranian Foreign Minister Mohammad Javad Zarif said the strikes “concluded” Tehran’s response to the killing of top military commander Qassem Soleimani. The World Bank on Wednesday trimmed its global growth forecasts slightly for 2019 and 2020 due to a slower-than-expected recovery in trade and investment despite cooler trade tensions between the United States and China.
Crude oil may witness some short covering after yesterday sharp fall. Crude oil prices rose on Thursday, recouping some of the heavy losses from the previous session as the market rebalanced after Washington and Tehran looked to defuse a potential Middle East crisis. Prices had soared in response to the killing of an Iranian general in an American air strike last week and Iran’s retaliatory attack on U.S. forces in Iraq on Wednesday, before diving more than 4% when two countries quickly ratcheted back tensions, hitting a three-week low. President Donald Trump on Wednesday dialled back on days of threatening commentary and said Iran was “standing down” after the missile attacks that left no casualties, with Tehran say the strikes “concluded” its response to the Soleimani killing. U.S. natural gas futures on Wednesday eased to a nearly four-month low on expectations last week’s storage withdrawal will be much smaller than usual and uncertainty that the weather will turn much colder in late January.
BASE METAL –
Base metals may trade with mixed bias. China’s producer prices in December fell 0.5% from a year earlier, official data showed, a sixth month of contraction as manufacturers struggled with weak demand and the U.S.-Sino trade war. London copper edged up in early Asian trade on Thursday, on track for a fourth straight day of gains, as most industrial metals rallied on signs that tensions between the United States and Iran would not escalate. U.S. President Donald Trump on Wednesday suggested Iran was “standing down” after its attack on U.S. forces in Iraq and said Washington did not necessarily have to hit back. Indonesia has approved environmental impact studies for factories to produce battery-grade nickel chemicals in Morowali, Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan said on Wednesday.
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