Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Below the Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
COMEX gold futures surged on Monday, driven by increased safe-haven demand amid rising geopolitical tensions, a sharp decline in the US dollar index, and falling US Treasury yields. The April delivery of COMEX gold climbed 1.85, reaching $2,901.10, as risk aversion grew following Friday’s tense meeting between Trump and Zelensky, which strained US-Ukraine relations and dampened prospects for a ceasefire with Russia. Additionally, Trump’s confirmation that trade tariffs on Mexico, Canada, and China will take effect on March 4 has raised concerns about a potential trade war. Further, string of disappointing US economic data has painted a bleak picture of the country's growth outlook, fueling expectations for two rate cuts this year, with the first anticipated in June and the second in September. Today, gold is trading above $2,900, as concerns over slowing growth and elevated inflation, triggered by US tariffs and geopolitical issues, continue to drive safe-haven demand.
WTI crude oil dropped to a three-month low of $67.90 per barrel yesterday before closing at $68.40 per barrel, after OPEC+ announced plans to unwind its production cuts as scheduled in April. The producer group intends to increase production by 138,000 barrels per day, though they have indicated that this gradual increase could be paused or reversed depending on market conditions. Additionally, reports suggesting that the US may offer some sanctions relief to Russia as part of broader talks aimed at improving diplomatic and economic relations contributed to the selling pressure. Today, oil prices extended their losses, trading below $68 per barrel, as the prospect of increased supplies, coupled with Trump’s confirmation of plans to impose tariffs on major trading partners, further weighed on market sentiments. According to a Global Times report, China is considering retaliatory measures against US agricultural and food products in response to the tariffs set to take effect on March 4.
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