Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
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Below the Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Comex Gold (December) surged by 1.2% to an all-time closing high of $2,504 per ounce on Monday, driven by escalating tensions in the Middle East, a decline in U.S. Treasury yields, and expectations of Federal Reserve rate cuts at its September 18 meeting. In a surprising shift, Fed Governor Michele Bowman, typically known for her hawkish stance, expressed a more neutral view, acknowledging recent progress on inflation. Despite this, the CME FedWatch Tool shows that money markets are now divided on whether there will be a 25 basis point or a 50 basis point rate cut at the September meeting. Comex Gold prices have stabilized above $2,500 per ounce as safe-haven demand from heightened geopolitical tensions in the Middle East offsets caution ahead of key U.S. data set to be released this week. Investors are focusing on the upcoming U.S. inflation data, which may provide more clarity on a potential soft landing and help shape the Federal Reserve’s monetary policy outlook.
WTI crude oil prices surged over 4%, reaching $80.20 per barrel, following Israel’s decision to put its military on high alert. The US has also announced plans to send a guided missile submarine to the Middle East amid rising concerns about potential attacks on Israel by Iran and its allies. Despite OPEC's reduction in its demand growth forecast for 2024 and 2025, crude oil prices held their gains. OPEC now anticipates that world oil demand will increase by 2.11 million bpd in 2024, down from the previous estimate of 2.25 million bpd, and projects a growth of 1.78 million bpd for 2025, slightly lower than last month's expectation of 1.85 million bpd. Today, oil prices edged lower as markets shifted their focus to concerns about Chinese demand. Also, Oil market report from the International Energy Agency due today may keep traders wary. However, risk of an Iranian attack may prevent significant declines in prices, as a wider regional conflict poses a direct threat to global oil supplies.
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