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

Comex Gold (December) futures edged lower yesterday due to a recovery in the dollar and U.S. Treasury yields. However, the decline was limited by expectations of multiple rate cuts and safe-haven demand from heightened tensions in the Middle East. On Monday, San Francisco Federal Reserve President Mary Daly indicated that she expects interest rates to be cut later this year, although she did not provide a specific timetable or details on the extent of any potential easing. Today, gold prices hold declines and are likely to trade within a range as ongoing stability in global markets counters expectations of an inter-meeting interest rate cut by the Federal Reserve.

WTI crude closed above $73 per barrel yesterday, buoyed by improved global market sentiment. Additionally, concerns about a potential retaliatory attack by Iran on Israel, following the assassinations of Hezbollah and Hamas leaders have also provided support. Besides, EIA has maintained its crude consumption estimate for 2024 at 102.9 million barrels per day (bpd) but slightly lowered its forecast for 2025 to 104.5 million bpd from 104.7 million bpd, indicating demand growth of 1.1 million bpd this year and 1.6 million bpd next year. Today, crude oil is trading above $73.5 per barrel, in line with stability in the Asian markets. Traders are also closely monitoring the upcoming EIA report after API data indicated a rise in U.S. oil inventories this week by 180,000 barrels for the week ending August 2, following five consecutive weeks of declines.

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