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Below the Quote on Gold and Crude 21st Aug 2025 by Kaynat Chainwala, AVP - Commodity Research, Kotak Securities

Spot gold gained nearly 1% on Wednesday, surging to $3,349 per ounce, supported by a pullback in the U.S. dollar from one-week highs amid growing concerns over the Federal Reserve’s independence. President Donald Trump called for Fed Governor Lisa Cook’s resignation over alleged mortgage fraud. Minutes from the Fed’s July meeting revealed that officials remain cautious about inflation and the labor market, with most considering it too soon to cut interest rates. Market expectations for a 25-basis point rate cut in September have declined, with CME FedWatch now showing a 82% probability, down from 94% a week ago. Today, gold is holding steady near $3,340 as investors await key U.S. economic data, including jobless claims, PMIs, and existing home sales. However, the main focus remains on Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium as markets are watching closely for signs of policy shift, particularly after last year's remarks signaled the start of a rate-cutting cycle.

WTI crude oil prices rebounded on Wednesday, rising to $63 per barrel, following a larger-than-expected 6 million barrel draw in U.S. crude inventories for the week ending August 15. The inventory drop was driven by a sharp rise in exports, which jumped by 795,000 bpd to 4.37 million bpd, while imports declined by 423,000 bpd to 6.49 million bpd. Despite the bullish inventory data, upside momentum was limited by progress in Ukraine peace talks and Russia's continued energy exports despite looming US tariffs on India. Today, oil edged higher to $63.2 per barrel as U.S. inventories remain well below seasonal averages. However, gains may be capped by expectations of higher OPEC output and potential easing of sanctions on Russian energy exports.

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