MCX MORNING UPDATE
Bullion counter may witness further profit booking as gold prices fell on Monday as expectations of an interim trade deal signing between the United States and China boosted the dollar and dented some of bullion’s safe-haven appeal. A Phase 1 trade deal between Washington and Beijing is due to be signed at the White House on Wednesday, although negotiations on a phase two deal could go on for months. U.S. Treasury Secretary Steven Mnuchin said on Sunday, China’s commitments in the Phase 1 trade deal were not changed during a lengthy translation process and will be released this week. A Wall Street Journal report said on Saturday Washington and Beijing have agreed to having semi-annual talks aimed at pushing for reforms in both countries and resolving disputes. Gold prices had gained 18% last year on the backdrop of a protracted trade tussle between the world’s top two economies and its impact on global growth.
Crude oil may witness remain on weaker side as oil prices edged down on Monday as fears of conflict between the United States and Iran eased, although the decline was checked by the planned signing of an initial U.S.-China trade deal this week, which could boost demand. U.S. energy firms reduced the number of oil rigs operating for a third week in a row as producers follow through on plans to slash spending on new drilling for a second year in a row in 2020. Drillers cut 11 oil rigs in the week to Jan. 10 in the biggest decline since October, bringing the total count down to 659, the lowest since March 2017, energy services firm Baker Hughes Co said in its closely followed report on Friday. Natural gas can dip lower 154 while facing resistance near 158. U.S. natural gas futures on Friday rose near 2% on forecasts for much more cold weather and heating demand later in January than previously expected.
BASE METAL –
Base metals may trade with mixed bias. Headline inventories in LME-registered warehouses fell by 3,100 tonnes to 132,725 tonnes, down from nearly 340,000 tonnes in August. Stocks in warehouses monitored by the Shanghai Futures Exchange fell 5.4% from last Friday to 133,745 tonnes. Metals maker Norsk Hydro expects its sale of low-carbon aluminium made from recycled drink cans and other scrap to more than double this year and to further increase in 2021 and beyond.