MCX MORNING UPDATE
Bullion counter may witness sideways movement as gold prices held steady on Thursday as investors remained concerned about existing tariffs and unresolved issues after Washington and Beijing signed a partial trade deal. U.S. President Donald Trump and Chinese Vice Premier Liu He signed a deal on Wednesday, defusing an 18-month row between the world’s two largest economies. Gold can dip lower towards 39500 while taking resistance near 39700 while silver can test 46000 while taking resistance near 46500. However, the interim deal fails to address structural economic issues that led to the trade conflict, does not fully eliminate the tariffs that have slowed the global economy, and sets hard-to-achieve purchase targets. Gold prices had gained 18% last year on the back of the trade war and its impact on global economy. Adding to concerns, China’s pledge to buy U.S. farm goods based on “market conditions” during the deal signing ceremony spurred doubts among farmers and commodity traders over Beijing’s lingering tariffs on U.S. exports. U.S. Federal Reserve expressed confidence that borrowing costs are at the right level to sustain growth and lift inflation to healthier levels, despite what businesses say is a lingering drag from uncertainty over U.S. trade policy.
Crude oil may witness lower level buying as oil prices rose on Thursday, propelled higher by the long-anticipated signing of an initial trade deal between Washington and Beijing that sets the stage for a potentially huge increase in energy supplies from the United States to China. Crude oil can recover towards 4150 while taking support near 4080. Under the socalled Phase 1 deal to call a truce in a trade war between the world’s two biggest economies, China committed to buying over $50 billion more of U.S. oil, liquefied natural gas and other energy products over two years. U.S. crude stocks fell in the latest week while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday. U.S. crude oil production rose to a record high of 13 million barrels per day in the week, the EIA said. Natural gas can dip lower 149 while facing resistance near 154. U.S. natural gas futures fell to a five-month low on Wednesday on forecasts for less cold weather and heating demand through the end of January than previously expected.
BASE METAL –
Base metals may trade with mixed bias. Copper may recover towards 456 while taking support near 450. London copper edged up on Thursday after the United States and China signed a preliminary trade deal, but gains were limited as investors doubted the pact would spur world economic growth. New home prices in China’s 70 major cities rose 6.6% in December from a year earlier, the slowest since July 2018, and down from November’s 7.1% on-year increase.
Investment & Trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.CapitalStars Investment Adviser: SEBI Registration Number: INA000001647.