MCX MORNING UPDATE
Bullion counter may remain on upside path as gold prices rose to a near two-week high on Tuesday as investors sought refuge in the safe-haven metal, amid concerns of a virus outbreak in China and tensions in the Middle East, while traders awaited a Bank of Japan policy decision. An outbreak of a new coronavirus has spread to more Chinese cities, including the capital Beijing and Shanghai, authorities said on Monday, and a fourth case has been reported beyond China’s borders. Gold can recover towards 40250 while taking support near 39900 while silver can test 47200 while taking support near 46700. The Bank of Japan is set to keep monetary policy steady and signal its cautious optimism over the global outlook on Tuesday, reinforcing market expectations that the rising cost of prolonged easing will keep the hurdle for further stimulus high. Global growth appears to have bottomed out but there is no rebound in sight and risks ranging from trade tensions to climate shocks make the outlook uncertain, a top International Monetary Fund official said on Monday.
Crude oil may witness lower level buying as oil prices rose on Tuesday after Libya declared force majeure on two major oilfields following a military blockade and protests escalated in Iraq, raising supply concerns. Rising disruptions in Libya are likely to keep oil prices well supported in coming days,” analysts from Australia and New Zealand Banking Group said in a note on Tuesday. Two major oilfields in southwest Libya began shutting down on Sunday after forces loyal to Khalifa Haftar closed a pipeline, potentially reducing national output to a fraction of its normal level, the country’s National Oil Corp (NOC) said. If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day (bpd), an NOC spokesman said. Libya has been producing around 1.2 million bpd recently. Crude oil can recover towards 4230 while taking support near 4140.Natural gas can dip lower towards 134 while facing resistance near 140 on unfavourable weather
and less demand.
BASE METAL –
Base metals may trade with weak bias. Copper may dip towards 450 while taking resistance near 454. China’s refined copper output rose 11.6% year-on-year in December to a monthly record high of 930,000 tonnes, data released by the National Bureau of Statistics (NBS) showed on Monday. Output for the whole of 2019 rose 10.2% year-on-year to 9.78 million tonnes, setting a new annual record high as China, the world’s top copper consumer, ramped up smelting capacity. Zinc can recover towards 184 while taking support near 181. Stocks of zinc in LME-approved warehouses are close to 20-year lows at about 50,000 tonnes, having been on a downtrend since October 2015. The China Iron and Steel Association recently forecast Chinese steel demand of about 890 million tonnes for 2020, up 2% from 2019.
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