Evening Track : Fed`s inflation signal dents Gold, Crude oil rises amid Mideast tensions by Kotak Securities Ltd
Comex Gold August futures trading below $3,390 per ounce, primarily due to the Federal Reserve's inflation warning, signaling fewer anticipated US rate cuts. The Fed held rates steady and projected two cuts by year-end, yet Chair Jerome Powell noted the persistent impact of tariffs on price gains. New economic forecasts indicate expectations of weaker growth, higher inflation, and reduced employment this year. A significant rise in consumer prices could curtail monetary easing, adversely affecting gold. This overshadowed safe-haven demand stemming from escalating Middle East tensions, including concerns over a potential strike on Iran. Despite the recent drop, gold has climbed nearly 30% this year, supported by broader geopolitical uncertainty, robust central bank buying, and strong inflows into exchange-traded funds.
WTI crude oil traded slightly positive near $73.80/barrel on Wednesday, driven by escalating geopolitical tensions between the US and Iran. The market is closely monitoring potential US military involvement in the conflict, which has already led to significantly higher oil prices, increased volatility, and a more bullish options market, with nearby crude premiums soaring. Senior US officials are reportedly preparing for a possible strike on Iran in the coming days, though the situation remains fluid. President Trump, after a meeting with top advisors, stated, "I may do it. I may not do it," regarding military action, despite earlier reports of a preapproved attack plan. The primary market concern revolves around the Strait of Hormuz, a critical shipping chokepoint for global crude, though no disruptions have been reported. Meanwhile, US crude inventories saw a substantial drawdown of 11.5 mb to 420.9 mb in the week ended June 13th, according to the EIA.
WTI crude oil traded slightly positive near $73.80/barrel on Wednesday, driven by escalating geopolitical tensions between the US and Iran. The market is closely monitoring potential US military involvement in the conflict, which has already led to significantly higher oil prices, increased volatility, and a more bullish options market, with nearby crude premiums soaring. Senior US officials are reportedly preparing for a possible strike on Iran in the coming days, though the situation remains fluid. President Trump, after a meeting with top advisors, stated, "I may do it. I may not do it," regarding military action, despite earlier reports of a preapproved attack plan. The primary market concern revolves around the Strait of Hormuz, a critical shipping chokepoint for global crude, though no disruptions have been reported. Meanwhile, US crude inventories saw a substantial drawdown of 11.5 mb to 420.9 mb in the week ended June 13th, according to the EIA.
European natural gas prices rose by 2.7% on Thursday, reflecting market anxiety over potential US involvement in the escalating Israel-Iran conflict. Traders are closely monitoring the situation for any impact on global gas flows, despite no current disruptions. Reports indicate senior US officials are preparing for a possible strike on Iran, though the situation remains fluid. This supply concern emerges as Europe races to replenish gas stockpiles ahead of the next heating season. Inventories concluded the past winter at their lowest since 2022, necessitating greater-than-usual replenishment efforts. While some European nations have boosted reserves, Germany, the continent's largest economy, is reportedly lagging, adding to the market's unease amidst geopolitical tensions.
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