IGI Logo

Below the Quote on Crude and Gold 19th June 2025 by Kaynat Chainwala, AVP - Commodity Research, Kotak Securities

COMEX August gold futures closed above $3,400 per ounce on Wednesday as geopolitical tensions remained high, with the Israel-Iran conflict entering its seventh day. Safe-haven demand increased after Iran’s Supreme Leader rejected former President Trump’s call for unconditional surrender. Supporting the bullish tone, a World Gold Council survey showed that 95% of central banks expect global gold reserves to rise, with 43% planning to increase their own holdings. Today, gold prices slipped below $3,390 as the US dollar held firm following the Federal Reserve’s decision to keep interest rates unchanged at 4.25%–4.50%. While the Fed cited a resilient economic backdrop, Chair Powell warned that higher prices linked to tariffs are likely, reinforcing a cautious outlook. Reflecting this outlook, the updated Summary of Economic Projections lowered 2025 GDP growth expectations to 1.4%, raised core PCE inflation to 3.0%, and projected the unemployment rate rising to 4.5%. The closely watched dot plot showed that 8 of 19 Fed officials expect two rate cuts this year. US markets and banks are closed today in observance of Juneteenth.

WTI crude oil fell below $73 per barrel yesterday despite the largest weekly decline in US crude inventories since July 2024, as traders focused on reports that Iran had proposed talks with the White House to end its conflict with Israel. Although a significant 11.4 million-barrel draw was reported in crude stocks for the week ending June 13, gasoline and distillate inventories both rose. Oil prices rebounded sharply to close above $75 per barrel after Iran denied making any such proposal to Trump and reiterated that it does not negotiate under duress, raising concerns over possible US involvement in the conflict. Today, oil prices are steady amid rising speculation of a potential US strike on Iran in the coming days.