MCX MORNING UPDATE
Bullion counter can remain on firm path as gold prices held steady near a one-week high on Friday, as a mounting coronavirus death toll supported safe-haven buying, while a stronger dollar kept a lid on gains. The Chinese province at the centre of the coronavirus outbreak reported a record rise in deaths and thousands more infections using a broader definition on Thursday. Gold can move towards 40800 while taking support near 40400 while silver can improve towards 46100 while taking support near 45500. Global shares eased as investors were spooked by a sharp rise in the number of coronavirus cases in China this week while oil prices extended gains on hopes of more production cuts. Investors were spooked after the head of the Revolutionary Guards said that Iran was ready to strike the United States and Israel if they give it any reason to do so. Meanwhile, U.S. prosecutors accused Huawei of stealing trade secrets and helping Iran track protesters in its latest indictment against the Chinese company. The risk-averse sentiment in the market supported bullion, often seen as an alternative investment during times of political and financial uncertainty.
Crude oil may witness some bounce back as oil prices were steady on Friday but are set for their first weekly gain in six weeks on the assumption major producers will implement deeper output cuts to offset slowing demand in China, the world’s second largest crude user. Crude prices have plunged about 20% from their 2020 peaks on Jan. 8 as oversupply concerns combined with worries about large fuel demand declines in China as the country’s quarantine to fight a coronavirus outbreak has halted economic activity. However, the Organization of the Petroleum Exporting Countries and its allied producers, known as OPEC+, are considering cutting output by up to 2.3 million barrels per day in response to the demand slump. Crude oil can recover towards 3690 while taking support near 3630. The market is signalling that some near-term demand for oil remains. The spread between the first-month April Brent future and the May contract has narrowed to a discount of only 1 cent a barrel on Friday from a discount of 33 cents a week ago. The International Energy Agency (IEA) on Thursday said that first quarter 2020 oil demand is set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the coronavirus outbreak in China. U.S. natural gas futures eased on Thursday on a small storage draw and record low global liquefied natural gas (LNG) prices despite forecasts for colder weather and more heating demand in late February than previously expected.
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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