MCX MORNING UPDATE
Bullion counter can witness safe haven buying as gold prices rose on Thursday as investors sold equities and sought the safety of bullion after a sharp jump in the death toll and infections from a coronavirus epidemic in China. The Chinese province of Hubei, the epicentre of the coronavirus outbreak, reported a record rise in the death toll on Thursday, as global health experts warned the epidemic could get far worse before it is brought under control. Gold can move towards 40750 while taking support near 40400 while silver can improve towards 46000 while taking support near 45500. The 14,840 new virus cases reported in Hubei alone on Thursday, dwarfing the 2,015 new confirmed cases reported in mainland China the previous day, after officials said they had adopted a new methodology for counting infections. U.S. Treasury Secretary Steven Mnuchin said on Wednesday that the negative economic impact from the virus outbreak is a one-time event that will not last beyond 2020. U.S. Federal Reserve Chair Jerome Powell on Wednesday reiterated his confidence in the U.S. economic outlook, even as he said he expected some drag “soon” from China’s new coronavirus epidemic.
Crude oil may witness some bounce back as oil prices rose for a third day on expectations that major producers are likely to enact deeper output cuts to offset the slump in demand caused by the coronavirus outbreak in China, the world’s second-largest crude consumer. The Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, recommended last week an additional output cut of 600,000 barrels per day (bpd) to its current 1.7 million bpd reduction to offset the disease-related demand losses. Crude oil can recover towards 3700 while taking support near 3630. OPEC yesterday lowered its 2020 forecast for demand for the group’s crude by 200,000 bpd, prompting expectations that OPEC+ will enact the cuts when the group next meets, possibly as early as this month. OPEC yesterday lowered its 2020 forecast for demand for the group’s crude by 200,000 bpd, prompting expectations that OPEC+ will enact the cuts when the group next meets, possibly as early as this month. Natural gas can recover towards 135 while taking support near 128. U.S. natural gas futures rose more than 3% on Wednesday on forecasts for colder weather and more heating demand over the next two weeks than expected earlier.
BASE METAL –
Base metals may trade with weak bias. Copper may dip towards 431 while taking resistance near 436. London copper prices fell on Thursday, as a surge in the number of deaths and infections from the coronavirus epidemic in China heightened concerns about demand from the world’s top consumer of the metal. China’s Hubei province, the epicentre of the coronavirus outbreak, said 242 people had died from the flu-like virus on Wednesday, the fastest rise in the daily count since the pathogen was identified in December. Rio Tinto operator of the giant Oyu Tolgoi copper-gold mine in Mongolia, said its copper concentrate shipments to China had slowed due to efforts by the authorities to
contain the spread of the coronavirus.
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