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Below the Quote on Crude and Gold 25th June 2025 by Kaynat Chainwala, AVP - Commodity Research, Kotak Securities

Comex August gold futures closed 1.8% lower on Tuesday, hitting a three-week low of $3,308.30/oz as ceasefire agreement between Iran and Israel reduced safe-haven demand for gold. Additionally, Fed Chair Jerome Powell's testimony before Congress, along with hawkish remarks from several FOMC officials, reinforced expectations that the Fed is in no hurry to cut interest rates. Despite this, the U.S. dollar weakened, falling to a one-week low, as US consumer confidence came in below expectations in June, reflecting growing concerns over tariff-related pressures on the economy and labor market. This helped gold recover modestly to settle above $3,330/oz. Today, gold is trading steadily above $3,340/oz, with the metal remaining highly sensitive to geopolitical developments. Traders are also cautiously awaiting further remarks from Powell during day two of his testimony, ahead of key US inflation data later this week.

WTI crude oil extended sharp losses on Tuesday, closing 6% lower at $64.4/bbl, after the Israel-Iran ceasefire eased concerns over potential supply disruptions from the oil-rich region. Both countries appeared to be observing the truce following initial breaches by each side. Adding to the market dynamics, President Trump stated that China could resume oil imports from Iran, although a White House official later clarified that U.S. sanctions on Iran remain in effect. Oil prices witnessed a sharp rally since Israel’s surprise attack on Iran on June 13, driven by fears that Iran might retaliate by blocking the Strait of Hormuz, a vital chokepoint through which nearly 20% of global oil supply passes. Today, crude prices edged slightly higher to $65.40/bbl, as traders assess the sustainability of the Israel-Iran truce and await the latest U.S. EIA inventory report, following API data, which showed a draw of 4.3 million barrels for the week ending June 20.