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

Comex Gold pulled back from a session high of $2,684.20 per ounce, closing at $2,665.60 on Monday, impacted by a stronger US dollar and reduced worries over the escalating conflict in the Middle East. Today, gold prices continued to decline, reaching $2,658 per ounce, as recent US economic data and comments from Federal Reserve officials indicated a slower pace for interest rate cuts. Federal Reserve Governor Christopher Waller noted that recent economic indicators suggest policymakers can approach future rate reductions with less urgency than they did at last month’s meeting. Gold prices may remain under pressure ahead of US retail sales data, as moderating inflation has raised expectations for quarter-point rate cuts in the coming meetings.

WTI crude oil dropped more than 2% due to disappointing economic data from China and rising oil production in Libya. Investors were also underwhelmed after China’s finance minister hinted at forthcoming fiscal stimulus and increased debt issuance, but provided no specific details on the size of the stimulus. China continues to face deflationary pressures and weak consumer spending, with the CPI rising just 0.4% year-over-year last month, down from a 0.6% increase in August and below expectations. PPI fell 2.8% year-over-year, exceeding the anticipated 2.5% decline. Additionally, trade data showed exports and imports rising only 2.4% and 0.3% in September, both below forecasts. In Libya, the National Oil Corporation reported that crude oil production has returned to pre-dispute levels, now at 1.3 million barrels per day, with the largest field, El Sharara, producing around 240,000 barrels daily. Today, WTI crude extended its decline, slipping below $71 per barrel as concerns about supply disruptions eased, especially after reports indicated that Israel may not target Iranian crude. The Washington Post reported Israeli Prime Minister Benjamin Netanyahu told the Biden administration he is willing to strike military rather than oil or nuclear facilities in Iran.

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