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 extended its rally for a fifth consecutive week, closing 2% higher at $2,835/oz, after surging to a record high of $2,862.90/oz. The yellow metal was supported by rising demand for safe-haven assets, driven by escalating trade war fears and the prospect of global retaliation. Despite brief pressures from profit-taking and a stronger dollar, gold remained resilient, bolstered by easing monetary policies from central banks and ongoing economic uncertainty. However, today, COMEX gold retreated sharply to $2,802/oz as traders flocked to the dollar, pushing it closer to a two-year high amid heightened trade war concerns. On Saturday, President Trump signed an order imposing a 25% tariff on Mexico and Canada, along with a 10% duty on China. In response, these key trading partners are preparing countermeasures. Trump also plans to introduce additional tariffs on other targets, including the EU, which has added to market uncertainty. There are growing fears that these tariffs could fuel inflationary pressures and keep the Federal Reserve on its "higher for longer" rate path.
WTI crude posted its second consecutive weekly loss, closing at $72.53 per barrel after dipping to a three-week low of $71.94 per barrel. This was largely driven by a rebound in the dollar and a significant rise in U.S. crude inventories. Oil prices surged above $75/bbl today, fueled by supply disruption concerns after President Trump imposed a 10% tariff on Canadian energy imports, in addition to the 25% tariff on goods from Canada and Mexico - two of the largest crude oil exporters to the U.S. However, prices have since retreated and are currently trading around $74/bbl amid hopes of a last-minute deal. Trump announced plans to speak with Canadian Prime Minister Justin Trudeau on Monday. Since about 60% of U.S. crude oil imports come from Canada, any potential deal could alleviate supply tightness concerns and push prices lower.
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