MCX MORNING UPDATES
BULLION – Bullion counter may remain on sideways path. Gold prices held steady on Wednesday, trading close to a more than six-year high on fears of an economic slowdown amid a protracted Sino-U.S. trade conflict, boosting appetite for the safe-haven metal. The yield curve inversion on benchmark U.S. 10-year Treasuries US10Y compared with the two-year yield US2Y was at its deepest since May 2007, when the U.S. subprime financial crisis started to unfold. The U.S. yield curve inversion, a portent for several past U.S. recessions, sent Wall Street stocks tumbling down on Tuesday. Investors are also focused on Sept. 1, when the first stage of U.S. tariffs on $300 billion worth of Chinese goods is scheduled to go into effect. In response, China has unveiled tariffs on U.S. products set to go into effect the same day.
ENERGY- Crude oil may trade with positive path as oil prices rose on Wednesday, with U.S. crude gaining 1% after an inventory report showed U.S. stockpiles fell more than expected, helping ease worries about economic growth from the Sino-U.S. trade war. U.S. crude stockpiles fell sharply last week as imports dropped, plummeting by 11.1 million barrels, compared with expectations for a 2 million barrel draw, data from industry group, the American Petroleum Institute (API), showed. U.S. President Donald Trump said on Monday that he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through calm negotiations. Crude oil prices have fallen about 20% from 2019 highs reached in April, partly because of worries that the U.S.-China trade war is hurting the global economy, which could dent demand for oil. China Commerce Ministry last week said it would impose additional tariffs of 5% or 10% on 5,078 products originating from the United States, including crude oil, agricultural products and small aircraft. U.S. natural gas futures fell on Tuesday as concerns about an impact to production from tropical storm Dorian took a back seat while output held near record peaks.
BASE METAL – Base metals may trade with sideways path. London copper prices edged down on Wednesday, as the lack of any clear moves to resolve the protracted U.S.-China trade conflict weighed on the demand outlook for the red metal. China foreign ministry reiterated on Tuesday that it had not heard of any recent telephone call between the United States and China on trade, and said it hopes Washington can stop its wrong actions and create conditions for talks. Rapidly rising use of nickel in the batteries that power electric vehicles over coming years means higher prices are needed to incentivise the development of new projects to boost supplies of the metal. Aluminum Corp of China Ltd,, known as Chalco, said on Tuesday its revenue rose 15.2% despite a 10% drop in the primary aluminium segment.
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