MCX MORNING UPDATE
Bullion Bullion counter can trade on volatile path as gold prices on Thursday eased from their highest in nearly seven years in the previous session, as safe-haven demand took a hit after a dramatic drop in new corona virus cases and on expectations that China will continue to shore up its economy. China reported on Thursday a drop in new cases in the province at the heart of the corona virus outbreak. Cases in Hubei province were 349 on Wednesday from 1,693 a day earlier and the lowest since Jan. 25, although it was accompanied by a change in methodology. Gold can move towards 41900 while taking support near 41600 while silver can improve towards 48300 while taking support near 47500. China is widely expected to cut its benchmark lending rate on Thursday, adding to a slew of fiscal and monetary measures in recent weeks, aimed at cushioning the virus impact on the economy. U.S. Federal Reserve policymakers were cautiously optimistic about their ability to hold interest rates steady this year, minutes of the central bank’s last policy meeting showed, even as they acknowledged new risks caused by the outbreak. A meeting of U.S. government officials to discuss further curbs on exports to Huawei and China is still on for Thursday, despite a pushback from President Donald Trump against stricter limits on shipments of U.S. products overseas. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, rose 0.2% to 931.60 tonnes on Wednesday.
Crude oil may remain on firm path as oil prices rose nearly 1% on Thursday, extending big gains from a day earlier, as the market worried about crude supply disruptions and demand concerns were cushioned after a sharp drop in new coronavirus cases at the epicentre of the outbreak. Crude oil can improve towards 3890 while taking support near 3810. Tensions in Libya that have led to a blockade of its ports and oilfields have shown no signs a resolution, while U.S. sanctions on a subsidiary of Russian state oil major Rosneft to cut Venezuelan crude from the market have helped rekindle global oil supply worries. Libya’s internationally recognized leader Fayez alSerraj dashed hopes of reviving peace negotiations on Wednesday after the Libyan National Army (LNA) of Khalifa Haftar shelled the port of the capital, which is held by al-Serraj’s government. Natural gas can bounce back towards 143 while taking support near 138. U.S. natural gas futures fell more than 1% on Wednesday as investors took profits after the contract touched an over one-month high in the previous session, while relatively warmer weather forecasts added further pressure.
BASE METAL –
Base metals may trade with mixed bias. Copper may move towards 434 while taking support near 428. Copper prices rose on Thursday after top consumer China’s monetary measures to prop up its virus-hit economy lifted expectations of higher demand for the metal. While the country’s central bank reduced its one-year and five-year loan prime rates, copper’s gains were checked as the move was widely expected. China’s Hubei province had 349 new confirmed cases on Wednesday, down from 1,693 a day earlier. The new figures include subtracting 279 cases that were not confirmed, a larger-than-usual number. Excluding the deductions, the number stood at 628, still a large drop.
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