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

COMEX gold reached a new peak of $2,694.90 per ounce, driven by expectations of further interest rate cuts by the Fed and rising geopolitical tensions. The CME FedWatch Tool currently indicates a 60.5% chance of a 50 basis point cut in November. Recent US economic data has presented mixed signals, with consumer confidence declining the most in three years and manufacturing PMI slipping further into contraction, while services activity remains robust. The escalating conflict between Israel and Hezbollah has also enhanced gold's appeal as a safe haven. Today, COMEX gold remains steady near its record highs as traders await a pre-recorded address from Fed Chair Jerome Powell, scheduled to air later today at the 10th annual US Treasury Market Conference. Additionally, final GDP figures and jobless claims will be closely watched for insights into the Fed's potential easing trajectory.

WTI crude oil fell over 2% to close below $70 per barrel yesterday, as easing supply disruptions in Libya and persistent concerns about Chinese demand outweighed the significant 4.5 million barrel drawdown in US oil stocks. The United Nations reported that representatives from Libya’s rival eastern and western administrations have initialed an agreement regarding the appointment of a central bank governor, with a signing ceremony scheduled for Thursday. According to the EIA, US crude stocks fell to 413 million barrels, the lowest level since April 2022, with declines also seen in gasoline and distillate stockpiles for the week ending September 20. Today, oil prices hold declines, trading around $69.70 per barrel, although sharp declines may be limited due to the ongoing intense conflict between Israel and Hezbollah.

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