MCX MORNING UPDATE
Bullion counter may witness some profit booking as gold prices fell on Wednesday, as the dollar firmed and investors assessed the risk of a global epidemic from a coronavirus outbreak from China that could have an impact on economic growth. The toll from the Wuhan coronavirus in China rose to six deaths on Tuesday and the first case was reported in the United States, sending markets tumbling on fears of economic damage as tourists canceled travel plans and airports stepped up screening. Gold can dip towards 39600 while taking resistance near 40100 while silver can test 45600 while taking resistance near 46500. U.S. Treasury Secretary Steve Mnuchin said on Tuesday fresh trade deals with China, Mexico and Canada this month could boost the U.S. economy and that growth would outperform projections, including those by the International Monetary Fund. China’s gold consumption fell for the first time in three years in 2019, as high prices and an economic slowdown hit buying in the world’s biggest market for the metal.
Crude oil may witness selling pressure as oil prices edged lower on Wednesday, extending the previous session’s drops, as investors continue to shrug aside the impact of almost all of Libya’s crude production being off-line amid plentiful supplies elsewhere. Libya’s National Oil Corporation on Monday declared force majeure on the loading of oil from two major oil fields after the latest development in a long-running military conflict saw forces loyal to commander Khalifa Haftar ordering the shutdown of facilities in the east and south of the country. Crude oil can dip towards 3850 while taking resistance near 4060. Natural gas can dip lower towards 134 while facing resistance near 143. U.S. natural gas futures dropped to a fresh three-year low below $2 on Tuesday on forecasts for mild winter weather through early February, despite record liquefied natural gas (LNG) exports and signs of a production slowdown. The weather in the U.S. Lower 48 states so far this winter has been much milder than usual with average
daily temperatures three degrees Fahrenheit higher than normal in December and five degrees higher during the first few weeks of January.
BASE METAL –
Base metals may trade with weak bias. Copper may dip towards 448 while taking resistance near 455. Copper prices slumped on Tuesday as investors liquidated recent bullish positions over fears that a new strain of coronavirus in China could hit economic growth in the world’s top metals consumer. Antofagasta reported a 5.8% drop in fourth-quarter copper production, citing civil unrest in Chile, though it still registered record annual output. Zinc can further dip towards 178 while facing resistance near 183. The premium of LME cash zinc to the three-month contract has increased to $22.25 a tonne, its highest since Nov. 29, having swung from a discount of $3.50 on Dec. 11. The premium indicates tighter availability of LME supplies.
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.