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 closed slightly lower, pressured by a recovery in the US dollar and bond yields following the Federal Reserve's decision to leave interest rates unchanged, as widely anticipated. The Fed maintained its target range at 4.25% to 4.50%, with Chair Powell indicating that the central bank requires real progress on inflation or signs of weakness in the labor market before adjusting rates. This suggests a prolonged pause in rate cuts, and affirms both Fed and market expectations of only two rate cuts this year, with the first likely in June. The Fed's "wait and watch" stance contrasts with Trump's calls for immediate rate reductions. Today, Comex Gold April futures traded steady around $2,798 per ounce, as traders now focus on key economic indicators, including GDP figures, jobs data, and pending home sales, for further insights into the US economy, especially given Powell's emphasis that future rate decisions will remain data-dependent.
WTI crude oil prices edged lower to $72.30 per barrel on Wednesday, as markets reacted to a significant increase in US crude oil inventories and braced for potential US tariffs. The EIA reported a substantial rise of 3.5 million barrels in US crude oil stocks for the week ending January 24, bringing total inventories to 415.1 million barrels, the highest level in nearly two months. Today, oil prices steadied near $72.70 per barrel as markets awaited further clarity on the potential tariffs, after President Trump's Commerce Secretary nominee, Howard Lutnick, indicated that Canada and Mexico could avoid the tariffs if they took action on illegal migration and fentanyl. Traders are also anticipating next week's OPEC meeting, although the group is expected to maintain its current supply policy, despite President Trump's calls to increase production and lower crude prices. Additionally, Saudi Aramco, the world's largest crude oil exporter, is expected to raise the price of its flagship Arab Light grade to Asia for March shipments, amid reduced supply from Russia to key Asian importers, India and China following US sanctions.
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