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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 extended its gains for a third consecutive day on Wednesday, reaching $2,682.80 per ounce, driven by safe-haven demand amid escalating geopolitical tensions. The Russia-Ukraine conflict intensified, particularly after Russia threatened to use nuclear weapons, although Moscow's assurances that every effort would be made to avoid nuclear war helped ease market concerns. Meanwhile, Federal Reserve officials presented contrasting views, leaving markets divided on the likelihood of a rate cut or pause in the December meeting. Fed Governor Michelle Bowman and Federal Reserve Bank of Boston President Susan Collins favored a cautious approach to rate cuts, while Fed Governor Lisa Cook cited continued disinflation as justification for more rate cuts. Today, gold edged higher but upside may be capped ahead of US Jobless Claims, the Philly Fed Manufacturing Index, and existing home sales data, as stronger-than-expected US data could support a dollar recovery. Market expectations currently suggest less than a 50% chance that the Fed will cut rates in December.
WTI crude oil prices fell by 0.7% on Wednesday, closing at $68.60 per barrel, pressured by easing concerns over supply disruptions and a rise in US inventories. According to the EIA, US crude stocks unexpectedly increased by 0.5 million barrels in the week ending November 15, marking a third consecutive weekly build. Equinor also announced the restoration of full output capacity at its Johan Sverdrup oilfield, which can produce 755,000 barrels per day (bpd), about a third of Norway’s oil production. However, the decline in prices was limited by ongoing geopolitical tensions as the US vetoed a UN Security Council resolution calling for a ceasefire in Gaza, and tensions between Russia and Ukraine remained high. Ukrainian forces, with US approval, expanded their use of Western-supplied long-range weapons against Russian military targets. Today, crude oil prices are holding steady near $69 per barrel, as concerns over further escalation persist as Moscow has previously warned against the use of Western weapons to strike Russian territory
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