MCX MORNING UPDATE
Bullion counter can some selling pressure at higher levels. Gold prices were flat on Wednesday as equities ticked up after China’s senior medical adviser suggested the coronavirus epidemic may be over by April, although uncertainty over the impact of the outbreak supported the safe-haven metal. China’s senior medical adviser said that the virus outbreak may be over by April, with the latest number of new infections falling to the lowest since Jan. 31. However, the death toll surpassed 1,100. Federal Reserve Chair Jerome Powell told Congress on Tuesday that the U.S. economy is in a good place, even as he cited the potential threat from the corona virus in China and concerns about the economy’s long-term health. Holdings of the world’s largest gold-backed exchange traded fund SPDR Gold Trust GLD rose 0.67% to 922.23 tonnes on Tuesday. Russian gold miner Polyus said it was investing in a new generation of projects, boosted by strong gold prices and higher output from the full ramp-up of its Natalka deposit in Russia’s Far East.
Crude oil may witness some bounce back as oil prices rose for a second day on Wednesday amid preliminary signs that new coronavirus cases are slowing in China, easing concerns over the demand impact from the disease in the world’s second-largest oil consumer. Bans on travel to and from China and on the movement of goods inside the country have cut fuel usage. The two biggest Chinese refiners have said they will reduce their processing by about 940,000 barrels per day (bpd) as a result of the consumption drop, or about 7% of their 2019 processing runs. Crude oil can test 3660 while taking support near 3570. The U.S. Energy Information Administration (EIA) on Tuesday cut its global oil demand growth forecast for this year by 310,000 bpd as the virus outbreak crimps oil consumption in China, the world’s second-largest economy. On the supply side, the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, recommended a further cut of 600,000 bpd last week to stem the oil price fall. Natural gas can recover towards 130 while taking support near 125. U.S. natural gas production and demand will decline in 2021 after hitting record highs this year, the Energy Information Administration (EIA) said in its Short Term Energy Outlook.
BASE METAL –
Base metals may trade with sideways bias. Copper may recover towards 436 while taking support near 431. Copper prices were steady on Tuesday as uncertainty over the impact of the corona virus outbreak in China capped gains even though hopes rose that the worst might have passed. The corona virus outbreak in China may be over by April, the country’s senior medical adviser said on Tuesday, while the number of new cases fell to the lowest since Jan. 31, brightening the mood.
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