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Commodity Research Evening Track by Kotak Securities Ltd
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Gold rise to record high on Softer U.S. Dollar, U.S. Rate-Cut Expectations
Comex Gold again reached a new all-time high on Friday as the dollar weakened further ahead of an anticipated Federal Reserve interest rate cut next week.
Gold futures surged by nearly 1.5% on Thursday and continued to climb on Friday, reaching $2,601 an ounce. This surge was fueled by the euro's strength
against the dollar. Markets now anticipate a 57% chance of a 25 bps cut and a 43% chance of a 50 bps reduction, according to the CME FedWatch tool. Overall,
gold prices have seen a significant increase this week, with a potential weekly gain of almost 3%.
WTI Crude Oil prices continue to surge for the 3rd consecutive session as it rose by 1% on Friday to trade near $69.75 per barrel, breaking a streak of weekly
declines due to supply disruptions caused by Hurricane Francine in the Gulf of Mexico. Moreover, nearly 42% of the Gulf Coast region's oil output was shut in
as of Thursday, and producers are assessing damage and conducting safety checks before resuming operations. The weaker U.S. dollar also provided support
to oil prices.
LME base metals are trading higher for 3rd day on signs of recovering demand in China coupled with reports from Bloomberg suggested that China might cut
interest rates on over $5 trillion of outstanding mortgages as early as this month to reduce borrowing costs and stimulate consumption. LME Copper surged
two weeks high of $9,235 due to increased demand from China. The Yangshan copper premium for imported cargoes also reached its highest point since January as
China's inventory levels declined significantly.
European natural gas prices jumped higher by 2.8% following the results of an Egyptian tender. The tender revealed intense global competition for fuel, raising
concerns about the region's ability to secure sufficient supplies. The price increase also triggered by news that Egypt's state-owned petroleum company, EGPC,
had purchased 20 cargoes for delivery in the fourth quarter. These cargoes acquired at a premium to European prices, indicating the strong demand and
competition for natural gas on the global market.
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