Commodity Research - Morning Insight - 26th Jun-2025 - Kotak Securities
Bullion
Comex August gold futures settled 0.28% higher on Wednesday, closing above $3,340 per ounce, while July silver gained 1.06%, supported by a weaker dollar as the Israel-Iran ceasefire held and U.S. new home sales data disappointed. The dollar’s retreat, coupled with persistent tariff uncertainty with just two weeks left until the expiration of the 90-day pause on Trump’s reciprocal tariffs on July 9, investor caution remains elevated. Trump hailed the swift resolution of hostilities between Israel and Iran, expressing optimism about future ties with Tehran that would rule out nuclear ambitions. Fed Chair Jerome Powell, in his congressional testimony, noted the Fed isn't rushing into rate cuts amid tariff-related uncertainties but acknowledged that easing could come sooner if inflation stays contained. Today, gold trade positive above $3,350 on softer dollar and declining Treasury yield as markets await key U.S. economic data, including GDP, jobs, and Fed officials' remarks.
Crude Oil
WTI crude oil rebounded and closed near $65/bbl, recovering from a sharp 13% decline over the previous two sessions, supported by a significant drop in U.S. crude and product inventories. According to EIA estimates for the week ending June 20, U.S. crude oil inventories fell by 5.8 million barrels, while gasoline and distillate stocks declined by 2.1 million barrels and 4.1 million barrels, respectively. Also, Trump reiterated his commitment to a "maximum pressure" campaign on Iranian oil, tempering expectations for any near-term sanctions relief, reversing his stance after his earlier comments suggesting that China might resume oil purchases from Iran. Today, oil prices are holding gains, supported by near-term supply tightness driven by seasonal demand. However, the upside may remain limited ahead of the upcoming OPEC+ meeting scheduled for July 6, where the market awaits clarity on whether the group will announce another output hike.
Natural Gas
NYMEX Henry Hub gas futures extended declines yesterday to $3.37 per MMBtu yesterday owing to cooler weather projections for eastern half of the US and sufficient inventories.
Base metals
LME base metals traded mixed, with aluminium easing while others, including copper, posted gains. Copper closed at $9,712.50/ton, supported by a sharp drop in global inventories and persistent concerns of a potential squeeze on the LME. Although spot premiums have slightly eased, supply remains tight amid record shipments to the U.S. ahead of proposed tariffs, depleting inventories elsewhere and pushing some Chinese smelters to ramp up exports to meet LME obligations. Copper stockpiles on the LME have tumbled over 60% YTD to around 93,000 tons. Overall, base metals are likely to remain supported by improved sentiment as the dollar slips to a three-year low.
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