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 futures surged to an all-time high of $2,877 per ounce buoyed by dollar weakness and safe haven demand. The greenback fell below the 108 level, following China's tit-for-tat response to US tariffs. Despite US President Donald Trump delaying tariffs on Mexico and Canada, a 10% duty on Chinese goods took effect, prompting Chinese retaliation. Escalating trade tensions between the two largest economies coupled with Geopolitical concerns in Gaza weighed on market sentiments and provided further boost to the yellow metal. Meanwhile, interest rate futures indicate expectations of two Fed rate cuts this year, supported by weaker JOLTS job openings and declining factory orders. Today, Gold reached fresh all-time highs of $2,886 per ounce as fears of US-China trade war may boost safe haven buying. Investors now cautiously await US Private payrolls, Services PMI, for further cues on economic activity in January.
WTI crude oil made a recovery, rising above $73 per barrel, following reports that President Trump intends to impose "maximum pressure" on Iran through sanctions and stricter enforcement of existing measures to reduce its oil exports to zero. Earlier in the session, prices had fallen below $71 per barrel due to concerns that China's retaliation to Trump's tariffs could escalate tensions between the world's two largest oil consumers, negatively impacting demand. China announced a 15% tariff on US liquefied natural gas and coal, and a 10% tariff on crude oil, in response to Trump's 10% tariff on Chinese imports. Oil prices edged lower today, hovering around $72.5 per barrel, as markets continue to assess the impact of ongoing trade tensions and potential US sanctions on Iran. Additionally, the American Petroleum Institute (API) reported a large increase in US crude oil inventories, with a build of 5.025 million barrels for the week ending January 24.
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