MCX MORNING UPDATE
BULLION – Bullion counter may witness sharp upside movement as gold prices climbed to a near six-year high on Friday after the U.S. Federal Reserve indicated earlier this week that it could cut interest rates as early as July, prompting a sharp fall in the dollar and U.S. Treasury yields. The Fed said on Wednesday it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month, as it took stock of rising trade tensions and growing concerns about weak inflation. U.S. benchmark 10-year Treasury yields on Thursday dropped below 2% for the first time in more than 2-1/2 years, while other maturities fell to multi-year lows as well, a day after the Fed flagged interest rate cuts as early as next month. The dollar struggled to get on the front foot on Friday, and was poised for a weekly loss against major currencies after the Fed joined global peers with plans to cut interest rates to support flagging economic growth. Russia gold reserves stood at 70.4 million troy ounces as of the start of June, the central bank said on Thursday.
ENERGY- Crude oil may witness upside movement as oil prices rose on Friday, with Brent crude heading for its first weekly gain in five weeks on tensions in the Middle East after Iran shot down a U.S. military drone and on hopes for a drop in U.S. interest rates that may stimulate global growth. While U.S. President Donald Trump played down the destruction of the drone, tensions remain high after the latest incident in the Gulf, which followed tanker attacks last week that raised concerns about crucial oil supplies being disrupted. The demand-side picture has also improved, with expectations that the U.S. Federal Reserve will cut interest rates at its next meeting and with plans by Beijing and Washington to resume talks to resolve a trade war that has hit economic growth prospects. Tension has been rising in the Middle East, home to over 20% of the world’s oil output, after attacks on two tankers near the Strait of Hormuz, a chokepoint for oil supplies. Washington blamed Tehran for the tanker attacks. Iran denied any role.
BASE METAL – Base metals may trade with upside bias. Three-month copper on the London Metal Exchange was flat at $5,975 tonne by 0109 GMT, after finishing up 0.9% in the previous session, during which it hit near one-month high of $6,027. The most-traded August copper contract on the Shanghai Futures Exchange was flat at 46,830 yuan ($6,835.50) a tonne. London copper prices were flat in early Asian trade on Friday, holding on to gains made after the United States and top metals consumer China agreed to restart trade talks and amid signs the Federal Reserve may further cut interest rates this year. Unions at Chile’s Chuquicamata mine called on members to reject a sweetened contract offer from Codelco, the world’s largest copper producer, amid a nearly week-long strike that has halved output from the sprawling copper mine.
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