MCX MORNING UPDATE
Bullion counter can remain on firm path but profit booking can be seen at higher level. Gold on Monday held near the two-week high scaled in the previous session on uncertainty over the impact of the corona virus outbreak on the global economy. The death toll from the outbreak in mainland China reached 1,770 by Sunday, up by 105 from the previous day, the country’s National Health Commission said on Monday. Asian shares stepped back from three-week highs as investors weighed the near-term hit on global growth from the virus, while the dollar hovered close to a more-than four-month high against key rivals. Gold can move towards 41000 while taking support near 40600 while silver can improve towards 46600 while taking support near 46100. The U.S. central bank had flagged concerns regarding a potential impact on the U.S. economy due to the outbreak, while keeping benchmark interest rates unchanged in the previous meeting. Speculators increased their bullish positions on COMEX gold in the week to Feb. 11, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday, indicating appetite for gold. Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, rose 0.2% to 923.99 tonnes on Friday from 922.23 tonnes on Thursday.
Crude oil may witness some profit booking as oil prices edged lower on Monday as investors brace for economic data in Asia due this week that should give a reading on how China’s coronavirus epidemic has affected oil demand. The weekly gains, the first since early January, were spurred by hopes that stimulus measures taken by China to support its economy amid the coronavirus outbreak could lead to a recovery in oil demand in the world’s largest importing country. But the International Energy Agency (IEA) said the virus is already set to cause oil demand to fall by 435,000 barrels per day (bpd) in the first quarter from the same period a year ago, in what would be the first quarterly drop since the depths of the financial crisis in 2009. Crude oil can dip towards 3680 while taking resistance near 3760. Investors are also anticipating that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will approve a proposal to deepen production cuts in a move to tighten global supplies and support oil prices. The group, also known as OPEC+, has an agreement to cut oil output by 2.1 million bpd until the end of March. Natural gas can bounce back towards 138 while taking support near 132. U.S. natural gas futures edged up on Friday on forecasts for more cold weather next week than previously expected despite projections for mild weather and lower heating demand in late February and near record low liquefied natural gas (LNG) prices.
BASE METAL –
Base metals may trade with sideways bias to upside bias. Copper prices edged up on Monday after China’s central bank lowered the interest rate on its medium-term loans to support an economy jolted by disruptions to logistics and factory output due to the coronavirus outbreak. The People’s Bank of China (PBOC) said it was lowering the rate on 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility loans to financial institutions, paving the way for a cut of the benchmark loan prime rate, due to be announced on Thursday. The PBOC said on Saturday Chinese lenders will tolerate higher levels of bad loans to support firms hit by the epidemic, which has killed over 1,700 people and infected about 70,550 in China, where it is severely disrupting business activities.
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.