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

Spot gold retreated on Wednesday after a three-day rally, settling below $3,740/oz, weighed down by stronger dollar and firmer Treasury yields. Also, traders grew cautious amid mixed signals from Fed officials. Fed Chair Powell reiterated the need to balance inflation risks against a slowing labor market, Fed Governor Michelle Bowman was in favor of rate cuts, while inflation remains a major concern for Fed officials Raphael Bostic and Austan Goolsbee. Additionally, US August new home sales surged 20.5% m/m to a three-and-half-year high of 800K. However, strong ETF inflows and geopolitical tensions provided a floor, as Trump backed Ukraine’s full territorial recovery with NATO support, while Kyiv struck oil infrastructure in Russia’s Volgograd region. Today, Gold edged above $3,745 ahead of key jobs and inflation data. Softer inflation could strengthen the case for Fed rate cuts, supporting bullion, with markets pricing two cuts this year.

WTI crude oil jumped above $65/bbl yesterday, buoyed by an unexpected decline in U.S. crude inventories and as Trump ramped up pressure on the EU to cut energy purchases from Russia. At the same time, continued Ukrainian attacks on Russian energy infrastructure have added upward pressure, as they disrupt Russian crude exports and tighten global supplies. According to the EIA, U.S. crude stocks fell by 0.6 million barrels for the week ending September 19, bringing total inventories down to 414.8 million barrels, about 4% below the five-year average for this time of year. In a major shift, Trump stated that NATO countries should shoot down Russian aircraft if they violate their airspace and said Ukraine could potentially reclaim its pre-war borders with support from the European Union. Today, oil prices are holding steady above $64.50/bbl after posting their biggest single-day gain in three months. While supply concerns continue to provide support, the sharp upside may be limited as oil companies in Iraq’s Kurdistan region have reached an agreement with both federal and regional governments to resume crude exports that have been halted for over two years.