Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
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Below the Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
COMEX Gold prices closed higher at the start of the week, amid safe haven bids from escalation in geo-political tensions and as investors weighed key US data this week for clarity on the Federal Reserve’s timeline for interest rate cuts. A proposal to end the Gaza war is in doubt after Israeli Prime Minister Netanyahu agreed only to a "partial" cease-fire. Friday's core PCE price index, the Fed's preferred inflation measure, US Final GDP and several comments from Fed officials will be in spotlight for the week. According to Bloomberg forecasts, the core PCE inflation is expected to increase at a slower pace of 0.1% m/m in May, while the headline PCE to see no change m/m, which can be a major pivotal evidence for Fed to start cutting down rates this year.
WTI Crude oil futures rose more than 1% on Tuesday as heightened tensions in middle-east and Europe raised supply concerns. Ukraine said on Monday that it recently hit more than 30 Russian oil processing and storage facilities, while Russia blamed the US for a Ukrainian missile strike on occupied Crimea and warned of unspecified consequences. Meanwhile, Israeli tanks pushed deeper into Rafah in the south and fought their way back into areas in the north. Talks and preparations of Israeli invasion of southern Lebanon and prospects of another war front opening with the Hezbollah might add to more tensions. Markets also eye key US PCE price index data this week to gauge Fed’s policy path and rate outlook.
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