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Below the Quote on Crude and Gold 26th June 2025 by Kaynat Chainwala, AVP - Commodity Research, Kotak Securities

Comex August gold futures settled 0.28% higher on Wednesday, closing above $3,340 per ounce, supported by a weaker US dollar as the Israel-Iran ceasefire held and US new home sales data came in below expectations. The dollar’s retreat, combined with lingering tariff uncertainty, just two weeks before the July 9 expiration of the 90-day pause on President Trump’s reciprocal tariff plan, has kept investor sentiment cautious. Trump praised the swift resolution of hostilities between Israel and Iran, expressing optimism for improved ties with Tehran and suggesting a potential shift away from nuclear ambitions. Meanwhile, Fed Chair Jerome Powell, in his congressional testimony, stated that the Federal Reserve is not rushing to cut interest rates amid ongoing trade-related uncertainties but noted that rate easing could come sooner if inflation remains contained. Today, gold prices held above $3,350 per ounce, buoyed by a softer dollar and declining Treasury yields amid reports that Trump is considering announcing a replacement for Fed Chair Jerome Powell as early as September or October, a move that could accelerate expectations of a US interest rate cut. Traders are also closely watching upcoming US economic data, including GDP figures, jobless claims, and comments from several Fed officials, for further cues on monetary policy.

WTI crude oil rebounded and closed near $65/bbl, following a sharp 13% decline over the previous two sessions, supported by a significant drop in US crude and product inventories. According to EIA estimates, US crude oil inventories fell by 5.8 million barrels for the week ending June 20, while gasoline and distillate stocks declined by 2.1 million barrels and 4.1 million barrels, respectively. Also, Trump reiterated his commitment to a "maximum pressure" campaign on Iranian oil, tempering expectations for any near-term sanctions relief, reversing his stance after his earlier comments suggesting that China might resume oil purchases from Iran. Today, oil prices are holding gains amid expectations that seasonal demand may boost near-term supply tightness. However, the potential for further upside may remain limited ahead of the upcoming OPEC+ meeting scheduled for July 6, where the market awaits clarity on whether the group will announce another output hike.

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