IGI Logo

Below the Quote on Crude and Gold 16 July 2025 by Kaynat Chainwala, AVP - Commodity Research, Kotak Securities

Comex Gold August futures closed 0.7% lower at $3336.7/oz on Tuesday, pressured by a stronger US Dollar Index and rising 10-year Treasury yields. The dollar climbed to 98.7 as US CPI rose 2.7% year-on-year in June, the highest since February and well above the Fed’s 2% target, reducing expectations of imminent rate cuts, with markets now pricing in just 43 basis points of easing this year, despite Trump’s renewed calls for rate reductions. Precious metals weakened further amid improved trade sentiment after US Treasury Secretary Bessent stated that US-China talks were in a "very good place," and President Trump announced a trade deal with Indonesia. Today, gold edged higher to $3,346, supported by renewed tariff threats from Trump, who signaled possible levies on pharmaceuticals by the end of the month, with additional duties on semiconductors also under consideration. Risk appetite remains subdued as new tariffs targeting 25 countries, including Canada, Mexico, and the EU, are set to take effect on August 1.

WTI crude oil prices extended their decline for a second straight session on Tuesday, settling at $66.5 per barrel, as supply disruption concerns eased after Trump delayed sanctions on Russian energy exports, giving Moscow a 50-day deadline to end the war in Ukraine. The downside was cushioned by strong summer demand prospects, better-than-expected Chinese data, and OPEC’s positive outlook for demand in the second half of 2025. Latest OPEC Monthly Oil Market Report (MOMR) showed that actual production increases were below target, with OPEC+ output rising by 349,000 barrels per day in June, falling short of the planned 411,000 bpd hike. Oil prices rebounded today to $67 per barrel, as a $1.20 prompt spread in backwardation, signals short-term supply tightness, while traders await the EIA inventory report after the API reported a modest 0.8 million barrel build for the week ending July 11.