Commodity Research Evening Track by Kotak Securities Ltd
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Comex gold hit a new record high of $2,635.9 an ounce, driven by the Federal Reserve's rate cut and the subsequent weakening of the US dollar. While the Fed's move seen as aggressive, Chair Jerome Powell emphasized the aim of maintaining a strong labor market and preventing economic downturn. Central-bank buying and haven demand due to conflicts in the Middle East and Ukraine have also helped, while interest from retail investors has picked up.
Still, concerns about a slowdown persist after several major US companies — including FedEx and Skechers U.S.A. Inc. — issued warnings this week about misses and weak demand. (Bloomberg)
WTI Crude Oil prices are trading little below $70.5 but have surged close to 3% this week, driven by a combination of the Federal Reserve's interest rate cut and ongoing tensions in the Middle East. The rate cut has boosted investor sentiment, while the explosions in Lebanon have raised concerns about potential disruptions to crude oil supplies from the region.
Crude’s weekly gain comes after the global Brent benchmark sank below $70 last week amid anxiety about weak demand, particularly in top importer China. The Fed’s move to start cutting rates now provides room for Beijing to offer more monetary and fiscal stimulus, according to a report in Securities Times. (Bloomberg)
LME base metals have experienced a significant uptick this week, mirroring the broader rally in global risk assets, primarily fueled by the Federal Reserve's decision to initiate its easing cycle. The announcement reinforced expectations of a soft landing for the US economy, further bolstering sentiment for base metals. Meanwhile, in China, the base metals market is also exhibiting signs of improvement as premiums on imported copper have reached their highest levels since the beginning of 2024, indicating increased demand. LME Copper has seen a remarkable rise trading 0.34% higher near $9,543, reaching a two-month high attributed to the Fed's half-point rate cut, which has positively impacted market sentiment.
European natural gas prices rebounded slightly on Friday after a sharp drop the previous day prices as it set for 3rd weekly decline due to higher in winter supply.. Bloomberg reported Thursday that Kyiv is in talks about supplying Azeri gas to Europe as a transit deal with Moscow nears expiry.
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