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

COMEX gold closed last week flat at $2,667.80 per ounce, as a strong U.S. labor report and comments from Federal Reserve Chair Jerome Powell tempered expectations for aggressive interest rate cuts. Following the report, the U.S. dollar surged to 102.7, its highest level since mid-August, and 10-year Treasury yields approached 4%, putting downward pressure on non-yielding bullion. COMEX gold fell to $2,651 per ounce after reaching a high of $2,690 earlier in the session, as positive jobs data reassured markets about the resilience of the economy and fueled hopes for a soft landing. This shift in sentiment favored modest rate cuts, with the possibility of a 50-basis-point cut at the November meeting largely dismissed. Today, COMEX gold remains steady near $2,665 per ounce, as tempered expectations for aggressive rate cuts by the Fed counter safe-haven demand amid ongoing tensions in the Middle East. Gold prices may continue to trade in a narrow range as caution prevails ahead of upcoming U.S. inflation numbers. If progress toward the Federal Reserve's 2% inflation target continues, some Fed officials might consider pausing rate cuts, which could exert downward pressure on gold prices in the near term.

WTI crude oil prices surged past $75 per barrel before closing the week 9% higher at $74.38, marking the steepest weekly gain since late March 2023. This increase was driven by concerns that Israel might target Iranian oil rigs in retaliation for Iran's recent missile launches, raising fears of disruptions to oil supplies through the Strait of Hormuz. Prices are likely to remain volatile due to ongoing anxiety about a potential broader regional conflict, especially after statements from Iran's Supreme Leader Ayatollah Ali Khamenei calling for increased anti-Israel efforts. Today, WTI crude oil prices have edged slightly lower, trading near $74.20 amid concerns over potential Israeli retaliation, although U.S. President Joe Biden has advised Israel against targeting Iran's oil fields.

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