Quote on Gold and Crude 16th June 2025 by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Below the Quote on Gold and Crude 16th June 2025 by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Comex August gold futures closed above $3,450 per ounce last week, driven by mounting geopolitical risks after Israel launched a pre-emptive strike on Iran's nuclear infrastructure. The move has sparked fears of a broader Middle East conflict, prompting a flight to safe-haven assets. Market uncertainty has been further compounded by ongoing concerns over U.S. trade policy and President Trump’s renewed tariff threats. Additionally, softer-than-expected U.S. inflation data has strengthened expectations for further interest rate cuts by the Federal Reserve this year. While the University of Michigan’s Consumer Sentiment Index rose to 60.5, falling inflation expectations may support the case for Fed easing. Today, Comex gold surged to $3,476.30 per ounce, underpinned by firm safe-haven demand amid escalating geopolitical tensions, dovish Fed expectations, and a weakening U.S. dollar. Further upside in gold remains possible if Middle East risks intensify or the Fed signals a more accommodative policy stance. The central bank is widely expected to keep rates unchanged at this week’s meeting, with investor attention focused on the updated FOMC economic projections for guidance on the rate outlook.
WTI crude oil witnessed a staggering 14% rally earlier in Friday’s session, the largest single-day gain since May 2020, climbing to $77.62 per barrel, its highest level since January. The sharp rally was triggered by Israel’s targeted strikes on Tehran’s nuclear and missile facilities, raising fears of Iranian retaliation and potential supply disruptions. Market concerns are growing over the security of oil shipments through the Strait of Hormuz, a critical chokepoint accounting for nearly 20% of global oil flows. While prices eventually eased to $73 per barrel by the session's close, escalating conflict has introduced a geopolitical risk premium that could keep oil prices elevated in the near term, especially as hostilities persist across Tel Aviv, Jerusalem, and Tehran. Today, WTI crude traded with heightened volatility, briefly spiking to $77.49 before retreating to below $74 per barrel. Ongoing military actions between Israel and Iran for a fourth consecutive day continue to stir fears of a broader regional conflict. Meanwhile, unexpectedly strong retail sales data from China provided a temporary relief and lifted market sentiments.
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