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Below the Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities

Comex Gold prices reached a new all-time high of $2,596 an ounce on Friday, fueled by the weakening dollar, as investors anticipated an interest rate cut by the Fed next week. Initial jobless claims increased as anticipated, while PPI rose more than expected. Additionally, Euro gained against the dollar as ECB refrained from pre-committing to a particular rate path reaffirming the need to take a data-dependent and meeting-by-meeting approach. As per CME FedWatch Tool there are now 43% chance of a 50-bps up from 14% a day ago. Geopolitical tensions, particularly in Ukraine, the Middle East, and US-China relations, alongside central bank gold purchases, are expected to sustain gold’s safe-haven demand in the near term. For today, investors will be watching the University of Michigan's Consumer Sentiment and inflation expectations for additional insights into the US economy and its potential impact on the Fed's decision.

WTI crude oil prices rose by 2.4% yesterday, driven by significant supply disruptions caused by Hurricane Francine. According to the Bureau of Safety and Environmental Enforcement, energy producers have shut in 730,000 barrels per day of oil production and nearly 992 million cubic feet of natural gas from Gulf waters. Besides, the International Energy Agency (IEA) has lowered its demand growth forecasts for both 2024 and 2025. The IEA now projects global demand to increase by 900,000 bpd this year and around 950,000 bpd next year, a sharp decline from the 2.1 million bpd growth in 2023, largely due to rapid slow down in demand growth consumption in China. Despite this, oil prices have continued to climb today to $69.50 per barrel, supported by a improvement in risk appetite amid growing expectations of Federal Reserve rate cuts.

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