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Gold and Crude trade higher on intense Geopolitical tension

COMEX Gold continuous contract reached a new all-time high of $2,502 per troy ounce, sparked by rising Middle East tensions and increasing prospects of the Federal Reserve lowering U.S. interest rates. However, it has corrected about 1% from record highs to trade near $ 2,480. After the assassination of Hamas leader Ismail Haniyeh in Tehran, investors are turning to gold over fears of an escalation in the Israel-Palestine conflict. While Federal Reserve Chair Jerome Powell said an interest-rate cut could come as soon as September after the US central bank voted to leave its benchmark unchanged.

WTI Crude Oil rose for the second consecutive session to trade more than 1% above $78 as Iran was reported to have ordered a retaliatory strike on Israel for killing a Hamas leader on its soil. As per EIA report, Crude oil production edged higher week-over-week by 25,000 barrels per day (b/d) to 13.3 million b/d and U.S. crude oil inventories dropped by 3.5 million barrels to 433 million barrels in the week ended July 26. Crude oil exports from the U.S. also hit 5 million barrels per day, the highest since April.

LME base metals are trading negative in today’s trade on reports China's factory activity fell for the third consecutive month in July, putting the economy on a shaky path that is undermining Beijing's efforts to sustain stronger growth. LME Copper down 1.40%, along with other metals. LME Zinc and Lead is trading lower by 0.80% and 0.30% respectively

European natural gas prices extended gains for a fifth consecutive trading session as it surged to their highest level in at least four weeks as intensifying tensions in the Middle East revived the geopolitical risk premium at a time of strong demand. Contracts have gained more than 13% from a week ago as stronger fuel consumption elsewhere in the world diverts energy supplies.

Europe has recently received less liquefied natural gas shipments, but demand has surged in regions such as Asia and Egypt, where severe temperatures have increased air conditioning requirements. (Bloomberg)

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