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 futures settled higher at $2,926 per ounce on Wednesday, supported by a weaker dollar amid tepid U.S. economic data and heightened trade tensions following President Trump’s new tariffs. The U.S. dollar extended its losses for a third consecutive session on Wednesday, dropping to a four-month low of 104.4 after U.S. private payrolls data missed expectations by a wide margin, raising concerns about an economic slowdown. The ADP Employment Change report showed only 77,000 new jobs in February, far below the upwardly revised 186,000 in January and expectations of 140,000. On the other hand, the ISM Services PMI rose to 53.5, surpassing forecasts of 52.6. Despite the mixed signals, market expectations for a rate cut in June remain intact. President Trump downplayed concerns about new reciprocal tariffs set to take effect on April 2, although Commerce Secretary Wilbur Ross hinted at potential relief for Canada and Mexico. Today, gold is holding steady near $2,925 as U.S. and Ukrainian officials discussed potential peace efforts, while market participants will closely watch the ECB’s policy decision, U.S. trade data, and unemployment claims figures.
WTI crude oil fell to a six-month low of $65.20 per barrel, driven by concerns over demand, exacerbated by fears of trade wars and OPEC+'s decision to resume reviving idle production in April. Additionally, U.S. crude inventories saw a much larger-than-expected increase of 3.61 million barrels last week, pushing total stocks to 433.8 million barrels, the highest since July 2024. However, prices recovered from their lows and closed above $66 per barrel, likely supported by the sharp weakness in the dollar. Today, Oil prices edge higher to $66.86/bbl following losses in the last three sessions, as markets assess the potential impact on demand amid tariff uncertainty, following Trump’s decision to delay newly imposed auto tariffs on Mexico and Canada by one month.
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