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

Comex Gold reached a record high of $2,755.4 per ounce on Monday, extending gains from Friday's session. This increase was driven by safe-haven demand amid heightened tensions in the Middle East and uncertainty surrounding the tight US presidential election, where Vice President Harris leads former President Trump by a narrow margin in leading national polls. Meanwhile, Fed officials have hinted at potential interest rate cuts, with the November meeting expected to see a 25-basis point reduction. However, gold prices retreated from higher levels to close the session at $2738.9/oz owing to stronger dollar and higher US treasury yields. Today, Gold prices edged higher to $2747/oz as investors are eyeing the BRICS Summit, where Russia aims to challenge US dollar dominance with a new global financial payment system. Besides, traders digest differing Fed official views as Fed Bank of Kansas City President Jeffrey Schmid said he favors a slower pace of reductions, while his San Francisco counterpart Mary Daly reiterated her view on the need to deploy additional cuts to guard against labor market deterioration.

WTI crude oil prices surged to $71 per barrel yesterday, driven by concerns over supply disruptions amid escalating hostilities between Israel and Iran, which could potentially lead to a wider regional conflict. Israel is reportedly preparing to target sites in Beirut linked to Hezbollah's financial operations and is considering further actions against Iran following a Hezbollah drone explosion near Prime Minister Benjamin Netanyahu's private residence over the weekend. Prices also received support from Chinese banks cutting their benchmark lending rates. People's Bank of China (PBOC) announced that the one-year loan prime rate (LPR) has been reduced to 3.1%, while the five-year LPR has been trimmed to 3.6%, following a cut to its key policy rate in September. WTI crude has steadied above $70 per barrel after a 2% gain yesterday, as markets remain on edge, closely watching how Israel will respond to recent missile attacks from Iran and subsequent actions by Tehran-backed proxies. However, sharp upside may be capped by bearish demand outlook by major oil agencies. IEA executive director Fatih Birol said that, for rest of this year, oil demand is “very weak” and added that China’s gradually weakening oil demand and an increase in electric vehicle sales will negatively impact the world’s oil demand growth over the next few years

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