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 rebounded sharply yesterday from a one-month low of $3,123.30/oz, driven by a weakening US dollar following a softer-than-expected April Producer Price Index (PPI) report. US PPI posted its largest decline in five years, suggesting that tariffs are squeezing profit margins. Additionally, US retail sales showed minimal growth in April, as consumers curbed spending on imported goods amid tariff-related price concerns. Weaker US economic data and heightened geopolitical uncertainty, particularly the stalled peace negotiations between Ukraine and Russia, spurred renewed demand for safe-haven assets like gold. Meanwhile, Federal Reserve Chair Jerome Powell cautioned that ongoing “supply shocks” may compel the central bank to maintain higher interest rates for an extended period. He also indicated that policymakers are considering revisions to the core framework guiding monetary policy decisions. Today, gold prices edged lower to $3,209/oz as markets await US housing figures and the preliminary University of Michigan Consumer Sentiment and Inflation Expectations reports for May.
WTI crude extended losses yesterday, falling to $60.5/barrel as President Trump stated that the US is close to reaching a nuclear deal with Iran. This raised expectations of lifted sanctions on Iranian oil, intensifying concerns about a potential supply glut later this year. Reports indicate that Iran may be willing to forego nuclear weapons and highly enriched uranium in exchange for sanctions relief. As OPEC's third-largest producer, Iran accounts for approximately 3% of global oil output. Adding to the bearish sentiment, the International Energy Agency (IEA) is now expecting global oil demand growth to slow to 650,000 barrels per day (bpd) for the rest of the year, down from 990,000 bpd in the first quarter, as economic headwinds and record EV sales is dampening consumption. Today, oil prices have inched higher to $62.3/barrel on the back of a weaker dollar. However, any sharp gains may be capped by the potential US-Iran deal and ongoing uncertainty surrounding global trade and economic growth.
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