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 futures closed lower on Tuesday, following stronger-than-expected US Retail Sales data, which indicated economic resilience. Retail sales rose by 0.7% in November, building on an upwardly revised 0.5% increase in October. Year-on-year growth for November reached 3.8%, surpassing expectations and highlighting consumer strength. Despite this robust retail performance, the downside pressure on gold was limited, as the strong sales data is not expected to alter market expectations for a quarter-point rate cut by the Federal Reserve at their December meeting. Currently, Comex gold is trading below $2,660 per ounce as investors await the FOMC statement. A 25-basis point rate cut is widely anticipated, but attention will be on the Summary of Economic Projections (SEP) and Fed Chair Jerome Powell's remarks, which could provide valuable insights into the Fed's policy trajectory for next year.
WTI crude oil extended its decline, falling to $69.20 per barrel yesterday, driven by growing concerns about the Chinese economy, which dampened demand prospects. Also, traders weighed the strong US retail sales data ahead of the Federal Reserve's announcements. Additionally, there are concerns that fears of renewed inflation, fueled by potential "Trump 2.0" policies, may prompt the Fed to slow the pace of future rate hikes in 2025. Today, oil prices are holding above $70 per barrel, supported by expectations of a significant draw in US oil inventories. The American Petroleum Institute (API) reported a 4.69 million-barrel drop in crude stocks for the week ending December 13, providing some support for prices. However, sharp upside moves may remain capped as traders remain cautious ahead of key US economic data and the Federal Open Market Committee's (FOMC) projections
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