MCX MORNING UPDATE
BULLION – Bullion counter may trade on sideways bias. Gold prices held steady below the $1,500 per ounce level on Tuesday as markets braced for talks between Britain and the European Union that will determine how smooth Britain departure will be from the trading bloc. Officials from Britain and the EU will meet at a make-or-break summit on Thursday and Friday that will determine whether or not Britain is headed for a so-called no-deal Brexit. Meanwhile, U.S. Treasury Secretary Steven Mnuchin said on Monday that an additional round of tariffs on Chinese imports will likely be imposed if a trade deal with China has not been reached by December, but added that he expected the agreement to go through. Markets also look for signs the U.S. Federal Reserve will cut interest rates at its next meeting later in the month.
ENERGY – Crude oil may trade with sideways bias as oil prices were little changed on Monday, holding onto 2% gains from Friday amid renewed geopolitical tensions in the Middle East, while a detente in the U.S.-China trade war buoyed market sentiment. Most of the gains were posted on Friday after an Iranian oil tanker was attacked off Saudi Arabia coast in the Red Sea. Investigations are under way to determine if the tanker was hit by missiles, which could ratchet up tensions between Tehran and Riyadh if confirmed. The emergence of a phase 1 trade deal between the United States and China and a goodwill move by Washington to suspend threatened tariffs on Chinese products also lifted global financial markets.
BASE METAL – Base metals may trade with positive bias. Shanghai copper prices edged up on Monday amid signs of progress in the U.S.-China trade talks, but gains were limited as the markets remained cautious about the prospects of a durable deal. U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike on Oct. 15, but existing tariffs remain in place and officials on both sides said much more work is needed before an accord could be agreed. The protracted trade dispute between the United States and China has slowed global growth and weakened demand for industrial metals. Signs of progress in the trade talks often resulted in a pick-up in metals prices.