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

COMEX gold prices to a record high of $2,772.60 per ounce last week as tightly contested race between Vice President Kamala Harris and former President Donald Trump boosted safe-haven demand. However, prices retreated to $2,722 during the week as strong US economic data raised expectations that the Federal Reserve would take a cautious approach to monetary easing. Concerns over the growing US budget deficit and a pullback in the US 10-year Treasury yield from 4.25%, its highest level since late July, helped gold prices rebound to $2,760.90 per ounce on Friday before closing at $2,754.60. Today, COMEX gold fell to $2,736 per ounce, weighed down by a stronger dollar and fading safe-haven demand following Israel's restrained strikes on Iran, which targeted military assets rather than oil and nuclear facilities.

WTI crude oil gained momentum on Friday, resulting in a weekly increase of 3.7%, as market participants remained on edge due to escalating hostilities between Israel and Iran, raising fears of a broader regional conflict. However, today WTI crude tumbled 5% to $67.79 per barrel as concerns about an all-out war eased, particularly following Israel's retaliatory strikes on Iranian military assets, specifically aerial defense systems and missile manufacturing facilities, rather than oil infrastructure. The Israel Defense Forces stated that three waves of predawn strikes on military targets in Iran on Saturday completed Israel’s retaliation while, Iran’s Supreme Leader, Ali Khamenei, indicated that Israel’s actions should not be exaggerated or downplayed, but he did not explicitly call for retaliation. The limited impact of these attacks and remarks from both sides suggests a potential end to direct conflict between the two nations. Prices may find some support as ceasefire talks in Gaza resumed on Sunday, with US, Egyptian, and Qatari mediators proposing an extendable truce and a hostage swap, although no mention was made of a permanent ceasefire.

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