Quote on Gold and Crude quote by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Below the Quote on Gold and Crude quote by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
COMEX gold edged higher on Friday despite stronger-than-expected U.S. labor data and signs of easing trade tensions between the U.S. and China. However, gold still ended the week down by more than 2% as the U.S. dollar gained momentum, closing above the 100 mark. The strong jobs report reduced market expectations for a Federal Reserve rate cut in the near term. Additionally, easing safe-haven demand, following reports that the U.S. had engaged China diplomatically to ease trade frictions, pushed gold prices sharply lower towards $3,200 per ounce. Today, gold surged to $3,280 per ounce on a softer dollar ahead of the upcoming FOMC policy meeting later this week. While a status quo decision is widely expected, markets cautiously eye Powell’s post-decision press conference. Furthermore, uncertainty around U.S.-China trade developments is likely to keep risk sentiment cautious.
WTI crude oil prices fell by 1.6% on Friday amid caution ahead of the OPEC+ meeting, where the group was expected to raise production for the second consecutive month in June. This decline extended last week’s losses to nearly 8%, and monthly losses reached 18.6%, marking the worst monthly performance since 2021. The selloff was fueled by reports that Saudi Arabia is unwilling to support prices through further production cuts and is prepared to endure a prolonged period of lower prices. Additional downward pressure came from potential progress toward a truce between Russia and Ukraine, developments in U.S.-Iran nuclear talks, and trade-related uncertainty. However, prices rebounded sharply to $59.9 per barrel after President Trump warned that countries purchasing oil from Iran would face U.S. sanctions, reinforcing the administration’s “maximum pressure” campaign on Tehran. Today, WTI crude oil prices resumed their decline, falling to $55.3 per barrel amid renewed selling pressure after OPEC+ confirmed a production increase of 411,000 barrels per day for June, nearly three times the initially planned volume, indicating that OPEC+ is no longer defending higher prices
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