Commodity Research Evening Track by Kotak Securities
US rate cut, Geopolitical woes to keep commodities volatile
Comex gold hit a new record high of $2,656.1 an ounce, surpassing the previous all-time peak set just a day earlier as Investors are closely waits for economic indicators like personal consumption expenditures and jobless claims to gauge the likelihood of further aggressive interest rate cuts by the Federal Reserve. Fed Governor Christopher Waller hinted at a series of quarter-point rate reductions and acknowledged the possibility of larger cuts if the job market softens.
Gold is also seeing support from increased haven demand as traders monitored escalating tensions in the Middle East, leading to concerns that the fighting between Hezbollah and Israel could broaden into a wider regional conflict. (Bloomberg)
WTI Crude Oil prices stabilized near $71 per barrel. after a significant weekly surge, as the strengthening dollar outweighed concerns about the escalating conflict between Israel and Hezbollah. Hezbollah's intensified attack on northern Israel on Sunday, followed by retaliatory strikes, raised fears of a broader regional conflict. The ongoing conflict poses a significant threat to oil output in the region, potentially leading to supply disruptions and further price volatility.
LME base metals experience decline due to stronger dollar and fresh signs that China’s economy continues to struggle, hurting the outlook for consumption in the world’s largest consumer. LME Copper trading lower by 0.16% near $9,461, other base metals also saw declines, with zinc falling 0.33% to $2,857 per ton and Aluminium dropping 0.70% to $2,468 per ton.
European natural gas rose about 2.4% on Monday, driven by heightened geopolitical risks and anticipation of colder weather. The market has been volatile amid escalating tensions in the Middle East, with Israel intensifying its air strikes against Hezbollah in southern Lebanon.
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