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 winning streak for the seventh consecutive week, the longest since August 2020, reaching a record high of $2,968.50 per ounce. Although there was a sharp pullback on Friday, gold still closed the week with modest gains, closing at $2,900 per ounce. The yellow metal benefited from increased safe-haven demand amid rising trade tensions, particularly after President Trump announced reciprocal tariffs on countries imposing taxes on US imports, fueling inflation concerns. Additionally, weak US retail sales data and growing expectations of a Fed rate cut further supported gold's appeal. The ongoing uncertainty surrounding trade and inflation is likely to continue to bolster bullion prices in the near term. Today, COMEX Gold rebounded to $2,916 per ounce, following a sharp decline in the previous session as US retail sales figures, coupled with hopes for a lower-than-expected PCE (Personal Consumption Expenditures) reading, have prompted money markets to price in around 40 bps of Fed rate cuts in 2025.
WTI crude oil prices slipped to $70.52 per barrel, nearing their lowest levels in two months. This decline was fueled by President Trump's discussions with Russia aimed at ending the Ukraine war, which raised expectations for a peace deal that could lead to the US lifting sanctions on Moscow. However, the downside was limited by improved market sentiment, supported by a delay in reciprocal tariffs. Last week, WTI crude experienced its fourth consecutive week of declines, influenced by the de-escalation of concerns over the cancellation of the Gaza ceasefire agreement and growing optimism about a potential Russia-Ukraine peace deal. Today, WTI oil edged higher to $71 per barrel, as US Treasury Secretary Scott Bessent stated that the administration aims to reduce Tehran’s oil exports to less than 10% of current levels. However, signs of easing in physical markets, with WTI's prompt spread flipping into bearish contango amid concerns of additional supply from Russia and Iraq, may limit sharp upside potential.
Above views are of the author and not of the website kindly read disclaimer
