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MCX Daily Report
04TH JULY 2019
News Highlights BULLION - Bullion counter may trade on sideways path. Gold prices were steady on Thursday after hitting a one-week high in the previous session, as gains in stock markets offset support from a weaker dollar and prospects of an interest rate cut by the U.S. Federal Reserve. European Union leaders nominated IMF chief Christine Lagarde as Mario Draghi’s replacement at the helm of the European Central Bank after marathon talks that have exposed deep divisions in the bloc. German 10-year Bund yields were at record lows and the U.S. benchmark yields are also falling on government monetary policy, giving the equity markets a boost and taking away investor interest from gold. U.S. Treasury yields fell on Wednesday with yields on U.S. benchmark 10-year Treasury notes hitting their lowest in over 2-1/2 years as euro zone yields tumbled on record lows on bets the European Central Bank’s next chief would stay a dovish course to help the euro zone economy. ENERGY- Crude oil may trade on weaker path as oil prices inched lower on Thursday after solid gains the day before, pressured by data showing a smaller-than-expected decline in U.S. crude stockpiles. U.S. crude inventories dropped by 1.1 million barrels last week, the Energy Information Administration (EIA) said on Wednesday. That compared with analyst expectations for a decrease of 3 million barrels. But crude prices were underpinned after the Organization of the Petroleum Exporting Countries and other producers such as Russia, a group known as OPEC+, agreed on Tuesday to extend oil supply cuts until March 2020. U.S. natural gas futures rose over 2% on Wednesday on forecasts for higher demand this week and record liquefied natural gas (LNG) exports over the next two weeks. BASE METAL - Base metals may trade with sideways bias. Base metals on the London Metal Exchange (LME) rose on Thursday following news that the United States and China are set to hold trade talks next week. Top U.S. and Chinese representatives are arranging to talk again next week, U.S. administration officials said on Wednesday, in a move to try to resolve a year-long trade war that has been weighing on global growth and metals demand. Base metals' complex were also supported by hopes that the U.S. Federal Reserve would cut interest rates this month after data from multiple sectors pointed to a slowing economic growth in the U.S. The U.S. trade deficit jumped in May and trade tensions between the United States and China helped drive activity in the services sector to a two-year low in June, further signs that economic growth slowed sharply in the second quarter.
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