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 closed 1.4% lower yesterday, reaching a one-week low of $3,073.5 per ounce, following reports that precious metals were excluded from former President Trump’s "reciprocal" tariffs. Gold inventories on COMEX have surged in recent months amid concerns that tariffs could disrupt shipments. However, fears of retaliation from key trading partners and the potential for a full-blown trade war boosted safe-haven demand, limiting losses. Additionally, gold remains supported by expectations of rate cuts, central bank purchases, and strong demand from gold-backed ETFs. Currently, gold is trading above $3,120 and may stay supported as markets remain on edge ahead of key US jobs report and speeches by Fed Chair Powell and other FOMC officials.
WTI crude oil plummeted by 6.4% on Thursday, marking its steepest decline since 2022, falling below $66 per barrel, following OPEC+'s announcement that it plans to increase oil production more than expected in May. The producer group will phase out output cuts by raising production by 411,000 barrels per day, significantly higher than the anticipated increase of just under 140,000 barrels per day. This move is likely intended to send a warning to countries like Kazakhstan, Iraq, and Russia, which have been consistently overproducing beyond their OPEC+ quotas. Oil prices were already under substantial pressure earlier in the session due to fears of a global trade war, as reciprocal tariffs from the Trump administration prompted both China and the EU to vow retaliation, weakening the global demand outlook. Today, oil prices continue to decline and edged closer to $66/bbl amid lingering concerns over tariffs and the broader demand outlook
Above views are of the author and not of the website kindly read disclaimer
