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 June gold closed 3.27% higher yesterday, marking its strongest single-day gain since April 2020, as a weaker US dollar and rising safe-haven demand—fueled by escalating US-China trade tensions, drove prices sharply higher. Geopolitical risks intensified after the US banned Nvidia’s H20 chip sales to China and former President Trump called for a review of rare earth tariffs. Gold prices surged to a record high of $3,358.4/oz as the US dollar slipped to a three-year low of 99.28. Despite the rally, Fed Chair Jerome Powell pushed back against near-term rate cut expectations, stressing the importance of avoiding tariffs that could trigger persistent inflation and slower economic growth. On the data front, March retail sales rose 1.4% month-over-month, beating expectations, while industrial production showed signs of slowing. Today, gold extended gains, hitting a fresh all-time high of $3,371.9/oz after Powell warned that uncertainty over US trade policy could weigh on the economy, dampening global risk appetite. Traders now await key US data releases, including housing starts, the Philly Fed Manufacturing Index, and initial jobless claims, for further direction.
WTI crude oil surged above $63 per barrel on Wednesday, supported by mounting supply disruption concerns, improving prospects for US-China trade talks, and falling product inventories. China signaled readiness to resume trade negotiations with the Trump administration, albeit under certain conditions. Hopes for a relaxation of Iranian oil sanctions diminished after the US demanded that Iran completely abandon its nuclear enrichment and weaponization program, a stance firmly rejected by Iranian Foreign Minister Abbas Araghchi, who called uranium enrichment “non-negotiable.” US crude inventories rose by 0.5 million barrels last week, while gasoline and distillate stocks declined by 2 million and 1.9 million barrels, respectively. Oil prices extended gains for a second straight session, climbing further above $63/bbl as the US Treasury announced new sanctions targeting Chinese importers of Iranian oil in an effort to cut Iran’s exports to zero.
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