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CAPITALSTARS – MCX NEWS UPDATE : 16 AUGUST 2019

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MCX MORNING UPDATES

BULLION – Bullion counter may remain on sideways to positive path. Gold prices gained on Friday as the steep fall in U.S. bond yields continued, while conflicting signals on the Sino-U.S. trade war added to economic uncertainty. The metal has gained nearly 2% so far this week, and is on track for its third straight weekly gain. China on Thursday vowed to counter the latest $300 billion U.S. tariffs, but also called on the U.S. to meet it halfway on a potential trade deal. On Thursday, U.S. President Donald Trump said he believed China wanted to make a trade deal, and that the trade conflict would be fairly short. Investors are focused on the Federal Reserve’s annual symposium next week. Traders see an about one-in-three chance of a 50 basis-point rate cut by the Fed this September. The European Central Bank’s (ECB) Olli Rehn on Thursday flagged the need for a significant easing package in September. The ECB is widely expected to cut interest rates by at least 10 basis points when it meets next month.

ENERGY- Crude oil may trade with upside path as crude oil prices rose on Friday after two days of declines, buoyed following data showing a rise in U.S. retail sales helped ease some concerns about a recession in the world’s biggest economy. U.S. retail sales rose 0.7% in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, according to data that came a day after a key part of the U.S. Treasury yield curve inverted for the first time since June 2007 prompting a sell-off in stocks and crude oil. The price of Brent is still up nearly 10% this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a group known as OPEC+. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices. But the efforts of OPEC+ have been outweighed by worries about the global economy amid the U.S.-China trade dispute and uncertainty over Brexit, as well as rising U.S. stockpiles of crude and higher output of U.S. shale oil. U.S. natural gas futures jumped more than 5% on Thursday after the release of a storage report that showed a much smaller-than-expected build last week.

BASE METAL – Base metals may trade on positive path. China’s refined copper output rose 4.8% year-on-year to 801,000 tonnes in July, data released by the National Bureau of Statistics showed on Friday. Copper prices were almost unchanged on Friday, amid conflicting messages about the ongoing trade discussions between the United States and China. U.S. President Donald Trump said on Thursday that U.S. and Chinese negotiators were holding productive trade talks and expected them to meet in September. Meanwhile, China vowed to counter the latest U.S. tariffs but called on the United States to meet it halfway on a potential trade deal. Prices of copper, seen as a gauge of economic health, have been hurt by the prolonged trade war between the world two biggest economies and have fallen 3.6% so far this year on the London Metal Exchange (LME). China July zinc output was up 17.4% y/y at 512,000 tonnes. China July lead output rose 13.2% y/y to 472,000 tonnes. Alumina output was up 2.9% y/y but down 3% from June at 6.22 mln tonnes, the lowest monthly total since December.

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