MCX MORNING UPDATE
Bullion counter may trade with upside bias. Gold prices held steady on Thursday below a near two-month peak hit on Christmas eve, as investors await details of a trade deal signing ceremony between the United States and China. U.S. President Donald Trump on Tuesday said there will be a signing ceremony with the Chinese President Xi Jinping to sign the first phase of the trade deal agreed to this month. Trump on Tuesday dismissed North Korea’s warning of a “Christmas gift,” saying the United States would “deal with it very successfully,” amid concerns that Pyongyang might be preparing a long-range missile test. Lingering concerns of growth remained as data on Monday showed, new orders for key U.S.-made capital goods barely rose in November and shipments fell, suggesting business investment will probably remain a drag on economic growth in the fourth quarter.
Crude oil may trade with upside bias as oil prices rose on Thursday, buoyed by a potential breakthrough in the Sino-U.S. trade war and OPEC-led efforts to constrain supply, although trading was quiet as many markets were in holiday mode. U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony for the so-called Phase 1 agreement to end their trade dispute that was put together earlier this month. The roughly 17-month trade war hit global economic growth and demand for oil, leaving prices range-bound for the most of the year. Lower demand also rendered supply cuts by the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia less effective in supporting the market. The so-called OPEC+ grouping agreed in November to extend and deepen production cuts that would take as much as 2.1 million barrels per day (bpd) of supply off the market, or roughly 2% of global demand. U.S. natural gas futures fell on Tuesday to their lowest in over tw N weeks on forecasts indicating warmer weather than previously anticipated, which will result in a reduction of heating demand.
BASE METAL –
Base metals may trade with sideways bias. The London Metal Exchange remains closed on Thursday for the Boxing Day holiday and will reopen on Friday. China’s top copper smelters are meeting in the southeastern city of Fuzhou on Thursday to set their floor treatment and refining charges (TC/RCs) for copper concentrate in the first quarter of 2020. China’s Shanghai Futures Exchange said on Tuesday it would relax trading position limits on its product contracts from next year in order to encourage trading activity and increase market participation. Shanghai aluminium prices fell in early trade on Thursday, heading for their first drop in eight days, on signs of a slowdown in demand ahead of the Lunar New Year holiday next month. Aluminium on the Shanghai Futures Exchange (ShFE).
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