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

Comex gold (December), which had dipped to $2,403 per ounce earlier last week amid broader market turmoil, experienced a strong rebound to $2,476 per ounce on Friday. This surge was driven by a market rally, despite China’s central bank refraining from gold purchases for the third consecutive month. Gold prices were also bolstered by escalating geopolitical tensions in the Middle East and speculation about nearly 100 basis points of rate cuts by the Federal Reserve by year-end. According to swaps data compiled by Bloomberg, money markets have fully priced in a rate cut in September and about 100 basis points of easing for the year. Today, Comex gold is holding steady above $2,465 per ounce ahead of US CPI and retail sales data due this week, which may provide fresh insights into consumer resilience.

WTI crude oil rallied nearly 5% last week, sharply rebounding from a seven-month low of $71.67 per barrel earlier in the week to $77.09 per barrel. This recovery was fueled by reduced fears of a US recession and production disruptions in Libya, where ongoing protests have led to the shutdown of the country’s largest oil field, Sharara. Today, oil prices remain strong, trading above $77 per barrel, supported by the possibility of a retaliatory strike from Iran on Israel. Tehran reiterated its determination to respond to the killing of Hamas’ political chief. Oil prices are likely to stay supported as markets monitor developments in the Middle East, with the US, Qatar, and Egypt calling for a new round of ceasefire talks to resolve the conflict in Gaza.

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