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

Comex gold futures experienced a sharp decline of more than 3%, marking their biggest single-day drop in nearly four years, falling over $90 to settle at $2,618.50 per ounce. This was due to de-escalating geopolitical tensions in the Middle East, as reports suggested that Israel and Lebanon had accepted the terms of a ceasefire agreement. Despite weakness in the US dollar index, it failed to cushion the decline. Additionally, the nomination of Scott Bessent as Treasury Secretary calmed market nerves, as he is expected to prioritize economic and market stability while supporting Trump's tariff and tax cut policies. Today, gold prices held declines, as President-elect Donald Trump’s vowed additional 10% tariffs on Chinese goods and 25% tariffs on all imports from Mexico and Canada, leading to sharp rebound in dollar. Traders are also cautiously awaiting key US economic indicators, including Consumer Confidence, House Price and Sales data, and the Richmond Manufacturing Index, to gauge the Fed’s next policy move. However, comments from Federal Reserve officials supporting a potential rate cut next month may help cushion further declines.

WTI crude oil fell by 3% to $68.70 per barrel as the geopolitical risk premium eased, following reports suggesting a potential ceasefire deal in the Middle East. The Israeli ambassador to the US indicated that a deal with Hezbollah could be reached within days, which, if finalized, could lead to a softer stance from Trump on Iran. Today, WTI crude attempted a recovery, trading above $69 per barrel. However, significant upside appears unlikely due to the sharp rebound in the dollar following Trump’s tariff threats against Canada, Mexico, and China. Additionally, easing supply disruptions and the upcoming OPEC+ meeting this weekend may keep oil traders cautious, though it is likely that OPEC+ will consider maintaining its current oil output cuts amid a weak demand outlook.

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