Quote On Gold and Crude by Kaynat Chainwala, Senior Manager - Commodity Research, Kotak Securities
Below the Quote On Gold and Crude by Kaynat Chainwala, Senior Manager - Commodity Research, Kotak Securities
Comex Gold rebounded on Tuesday after declines in the previous two sessions, closing above $2,920 per ounce, driven by concerns over the economic impact of Trump's tariffs, which pushed the dollar to a five-month low. Geopolitical tensions also fueled safe-haven buying as Ukraine launched its largest drone attack on Moscow, with Russia intercepting 343 drones and threatening retaliation using the "Oreshnik" hypersonic missile. Meanwhile, Ukraine indicated its readiness for a ceasefire, stating that the US must convince Russia to agree. Gold prices closed near session highs, despite US JOLTS job openings rising to 7.74 million in January, surpassing forecasts. Today, gold remains steady below $2,920 as markets cautiously await the US CPI data to gauge the Fed's potential interest rate stance for 2025, with a hotter inflation reading potentially dampening expectations for three rate cuts in 2025. According to Bloomberg estimates, the US Consumer Price Index (CPI) is expected to rise by 0.3% in February, following a 0.5% increase in January, with the core measure also anticipated to see a 0.3% uptick. However, any sharp downside may be limited as President Donald Trump’s fluctuating tariff plans could further bolster gold’s appeal as a safe haven.
WTI crude prices attempted a recovery and closed above $66 per barrel yesterday, largely driven by a weaker dollar, which slipped to a five-month low of 103.21 amid growing concerns about a US economic slowdown. However, significant gains were capped by lingering tariff tensions, OPEC+'s plan to increase output, and the potential for a ceasefire deal in Ukraine. Additionally, the EIA revised its oversupply estimates for this year and next, citing reduced flows from Iran and Venezuela. According to the EIA's Short-Term Energy Outlook, global oil markets are expected to average an oversupply of 500,000 barrels per day in 2026, down from the 1 million barrel-a-day surplus projected in last month’s report, while the surplus expected for this year was revised to 100,000 barrels per day, down from 500,000 barrels. Today, oil prices extended their gains, surging to $66.84 per barrel, supported by escalating geopolitical tensions in the Middle East, as the Houthis announced they would immediately resume attacks on Israeli ships, following through on their warning to Israel to lift the blockade of aid into Gaza within four days. However, significant upside may be limited by caution ahead of the EIA data release, as the API reported a massive 4.24 million barrel increase in oil stocks
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