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 August futures rallied 2.5% yesterday to a three-week high of $3,408 per ounce, driven by a surge in safe-haven demand amid intensifying US-China trade tensions. Both nations have accused each other of violating the existing trade truce, significantly dampening hopes for renewed negotiations. In response, China has vowed retaliatory measures, stoking fears of a prolonged trade conflict. Also, Trump's plan to double tariffs on steel and aluminum imports effective June 4 drew a sharp response from the European Union, which warned the move could derail trade talks with the US and prompt retaliatory measures. Geopolitical risks also added to gold’s bullish momentum as renewed conflict between Russia and Ukraine and fears of a possible US or Israeli strike on Iran’s nuclear facilities, have further soured global risk sentiment. Also, comment by Federal Reserve Governor Christopher Waller that any tariff-driven inflation would likely be temporary, giving the Fed scope to deliver “good news” rate cuts in 2025, another supportive factor for gold prices. Today, gold edged slightly lower, dipping below $3,390 per ounce, as investors await the JOLTS job openings report and remarks from several Federal Reserve officials for fresh monetary policy signals.
WTI crude oil prices surged nearly 3% yesterday to $63.9 per barrel, driven by escalating geopolitical tensions that dampened hopes for a quick resolution to ongoing supply disruptions involving Russia and Iran. Ukraine launched large-scale drone attacks on Russian air bases deep within the country, while Iran rejected International Atomic Energy Agency (IAEA) reports of a growing stockpile of enriched uranium. Adding to the bullish momentum, OPEC+ announced it would stick to its planned production increase of 411,000 barrels per day (bpd) for July, matching the pace set in May and June and falling short of the larger hike some market participants had anticipated. Today, oil prices extend gains as uranium enrichment remains a key obstacle in the U.S.-Iran nuclear negotiations. President Trump reiterated that the U.S. will not accept any deal that allows uranium enrichment, while Tehran is demanding assurances that any agreement will include the removal of sanctions. Oil prices are also receiving seasonal support, with U.S. gasoline demand expected to rise sharply as the summer driving season begins.
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