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Bullion 

On Thursday, spot gold closed over 0.5% higher and silver up 1.1%, both reaching five-week highs supported by a weaker dollar and expectations of likelihood of faster and deeper rate cuts. Gold continued to benefit from safe-haven demand amid ongoing geopolitical tensions in Ukraine and the Middle East, as well as uncertainties linked to US tariffs. Silver found support from stronger US Q2 GDP, revised higher than expected, which supports demand for industrial metals. Markets reacted strongly after comments from German Chancellor Merz indicated a potential Putin–Zelensky meeting is unlikely. Meanwhile, US jobless claims edged lower, but signs of softening labor momentum are strengthening dovish Fed expectations. Today, Gold hovered around $3,410, near its highest level in over a month, as investors now price in over 85% probability of a September quarter-point cut, with focus shifting to today’s PCE inflation report.

Crude Oil

WTI crude oil prices surged to $64.7 per barrel on Thursday amid escalating Russia-Ukraine tensions, after EU mission and British Council buildings in Kyiv were hit in the deadliest Russian drone and missile attack since July. At the same time, Ukrainian forces reportedly used drones to strike two Russian oil refineries overnight. These developments suggest that diplomatic efforts, those led by Trump, to resolve the conflict that began in 2022 have so far proven unproductive. Meanwhile, traders are cautiously monitoring India's response to newly imposed U.S. tariffs. Larger-than-expected drawdown in U.S. crude stocks and a weaker dollar further supported oil prices. Oil prices slipped to $64/bbl today amid demand concerns as the U.S. summer driving season winds down. Also, OPEC+ unwinding output cuts could increase global supply, putting further pressure on prices.

Natural Gas

NYMEX gas futures extended gains to $2.99/mmBtu buoyed by below average storage build of 18 Bcf for the week ending August 22 and robust LNG export flows.

Base metals

Base metals closed Thursday on a mixed note, with copper climbing to $9,818/ton on the LME and above Rs.891/kg on the MCX, buoyed by a weaker dollar and growing bets on a September Fed rate cut. Signals from Fed officials, including Governor Waller, reinforced expectations of policy easing, adding further support. Copper gained strength from rising investment in production to meet future demand from clean energy transition. Aluminium too gained, underpinned by supply constraints as Beijing capped smelting capacity to curb emissions, while high energy costs have pressured producers outside China, with closures looming in places like Mozambique. Base metals are expected to stay firm on Friday, with copper finding support from policy cues, while aluminium may extend gains on tightening supply.

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