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

COMEX Gold prices declined on Tuesday, as hawkish Fed statements boosted the greenback and weighed on the market sentiments. Federal Reserve Governor Michelle Bowman said she sees a number of upside risks to the inflation outlook, and reiterated the need to keep borrowing costs elevated for some time. Heightened geo-political tensions and prospects of an Israeli invasion of the southern Lebanon provided some cushion. The S&P CoreLogic Case-Shiller 20-city home price index in the US rose 7.2% yoy in April 2024, easing from an upwardly revised 7.5% increase in March, but above forecasts of 6.9%. Attention is turning to Fed’s preferred PCE price index for more clues on potential future rate cuts.

WTI Crude oil futures declined more than 1% on Tuesday, but is holding near the two month high of $81.9 per bbl notched yesterday as geo-political risks and anticipation of higher summer demand keeps the prices buoyed. US oil and fuel stockpiles have decreased, and gasoline demand is rising as the country enters its peak consumption period. Ukrainian drone attacks on Russian oil infrastructure, along with rising odds of an Israeli invasion of southern Lebanon keep the prices supported. API inventory data released earlier today showed that stocks of crude oil in the US rose by 900,000 barrels during the previous week and investors keenly await EIA data later today.

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