MCX MORNING UPDATE
Bullion counter can remain on firm path as gold prices hit a two-week high on Tuesday as global equities retreated after Apple Inc flagged revenue miss amid the coronavirus outbreak, sobering investor optimism. The death toll from a coronavirus outbreak in mainland China rose to 1,868, as of the end of Monday, up by 98 from the previous day, the National Health Commission said on Tuesday. Gold can move towards 41100 while taking support near 40800 while silver can improve towards 46700 while taking support near 46200. More than 300 American cruise liner passengers, including 14 who tested positive for coronavirus, were flown home to military bases in the United States after two weeks under quarantine off Japan. The risk-averse sentiment in the market supported bullion, often seen as an alternative investment during times of political and financial uncertainty. The Trump administration is considering changing U.S. regulations to allow it to block shipments of chips to Huawei Technologies from global chip supplying companies, which would be a blow to the world’s no. 2 smartphone maker. However, market sentiment got a boost on Monday after China’s central bank cut the interest rate on its medium-term lending on Monday as policymakers sought to ease the drag to the businesses from the virus outbreak.
Crude oil may witness some profit booking as oil prices slipped on Tuesday on lingering concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand, tracking losses in financial markets. While it’s more comfortable to call oil higher, given the likely pent-up demand to lead to a recovery from second quarter, it’s far too early to suggest oil market concerns have dissipated,” said Stephen Innes. The number of new coronavirus infections in mainland China fell below 2,000 on Tuesday for the first time since January, Chinese health officials said, although global experts warn it is too early to say the outbreak is being contained. Crude oil can dip towards 3640 while taking resistance near 3770. The International Energy Agency (IEA) said last week the virus was set to cause oil demand to fall by 435,000 barrels per day (bpd) year-on-year in the first quarter, in what would be the first quarterly drop since the financial crisis in 2009. Saudi Arabia’s crude oil exports in December 2019 were unchanged at 7.37 million barrels per day (bpd) month-on-month, official data showed on Monday. Natural gas can bounce back towards 140 while taking support near 135.
BASE METAL –
Base metals may trade with sideways bias. Copper may dip towards 431 while taking resistance near 436. In a sign of stalled activity in China’s manufacturing sector, base metal stocks in warehouses monitored by the Shanghai Futures Exchange are rising. Copper stocks, at more than 262,000 tonnes, are at their highest since mid-March and nearly double the level on Jan. 19. Copper prices climbed to three-week peaks on Monday after top consumer China cut interest rates to offset the economic damage from the coronavirus, though worries over demand for industrial metals capped gains.
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