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 June gold futures settled at a record closing high of $3,177.5 per ounce, rising 3.19% on Thursday, driven by a sharp decline in the US dollar index, which fell to a more than six-month low. Risk off sentiment gained momentum following the US announcement of a 145% tariff on Chinese imports, escalating trade tensions despite President Trump’s 90-day tariff pause for other countries. Geopolitical instability in the Middle East also supported safe-haven demand for gold. Additionally, global gold ETF inflows rose for a fourth consecutive month in March, accompanied by continued central bank buying. Cooler-than-expected US inflation data and a rise in jobless claims reinforced expectations of a dovish Federal Reserve. The likelihood of a rate cut at the upcoming June 17–18 FOMC meeting increased following the release of the CPI report to 87%, up from 74% the previous day. On Friday, gold extended gains to a fresh record high of $3,240 per ounce, supported by the dollar's extended decline to near three-year lows and persistent safe-haven buying.
WTI crude oil erased all gains from the previous session, which had been driven by President Trump’s announcement of a 90-day pause on newly imposed reciprocal tariffs for several countries. However, the exclusion of China from this pause, along with sharply increased duties on Chinese goods, weighed heavily on market sentiment, dampening demand prospects and dragging WTI back below $60 per barrel. Trade tensions between the US and China escalated further, with Trump raising tariffs on Chinese imports to 125%, prompting China to retaliate with 84% tariffs on US goods. Adding to the bearish outlook, the Energy Information Administration (EIA) slashed its global oil demand growth forecast for 2025 to 900,000 barrels per day, down by 400,000 barrels from its previous estimate. Today, WTI crude remains under pressure and trades near $60 per barrel as US tariffs on Chinese imports were further raised to 145%, heightened fears of deeper retaliation and a potential global economic slowdown.
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