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 closed moderately higher on Tuesday at $2,621.30 per ounce, as traders assessed geopolitical developments and a stronger US Dollar. Gold initially faced pressure after former President Trump proposed imposing 25% trade tariffs on Mexico, Canada, and China. However, mixed US economic data provided some support, allowing the metal to rebound from intraday lows of $2,605. The Conference Board Consumer Confidence Index rose to 111.7 in November, improving from October's 109.6, while New Home Sales plummeted 17.3% in October, and the Richmond Fed Index held steady at -14, worse than the expected -10. Minutes from the November FOMC meeting indicated a cautious stance on future interest-rate cuts but acknowledged growing optimism about inflation approaching the 2% target and a strong labor market. Today, Gold has risen to $2,640 per ounce as the market shifts focus to key data releases, including the PCE Price Index, Q3 GDP revisions, and weekly jobless claims, ahead of Thursday’s Thanksgiving holiday. CME’s FedWatch tool currently shows a 66.6% probability of a December rate cut. A sharp uptick in the Fed’s preferred inflation gauge could prompt traders to scale back their expectations for future interest rate cuts.
WTI crude oil fell marginally yesterday to close below $69 per barrel, as reports of a delay in OPEC's output restart countered the impact of easing geopolitical tensions. Israel and Hezbollah reached a cease-fire agreement for Lebanon, providing some relief. According to delegates, key OPEC+ nations have begun discussions to delay the planned oil production restart in January, potentially for several months, due to concerns about a global oversupply. Israel also reached a 60-day cease-fire deal with Hezbollah after weeks of US-mediated talks, marking a potential first step toward ending a 13- month-long conflict. Today, oil prices held steady ahead of the US EIA inventory data, after the API reported a larger-than-expected stock drawdown of 5.9 million barrels for the week ending November 22. However, sharp upside in prices may be capped, as US President Biden is actively seeking a cease-fire between Israel and Hamas, with the involvement of Egypt, Qatar, and Turkey.
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