IGI Logo

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

Comex Gold futures rebounded sharply from lower levels, closing marginally lower at $2,928.7/oz. Safe-haven demand, driven by ongoing geopolitical uncertainty, offset the impact of hot US inflation data. Israel is preparing for potential renewed hostilities in Gaza, while US-Russia talks raised hopes of an end to the war in Ukraine. US CPI rose above 3% YoY for the first time in six months, exceeding forecasts and December’s 2.9% increase. Core CPI climbed to 3.3% YoY, surpassing the projected 3.1%. This led interest rate swap traders to lower their expectations, now predicting just one quarter-point Fed rate cut this year, down from two before the data. Fed Chair Powell acknowledged progress in taming inflation but stressed that restrictive policies remain necessary unless inflation approaches the 2% target. Today, gold is trading near $2,950/oz as markets assess Trump’s protectionist trade policies. Investors are also awaiting PPI and unemployment claims data for further guidance on monetary policy.