Gold Falls After a 9-Day-High

Gold fell in commodities on Friday morning in Asia after reaching a nine-day high overnight. The continuing U.S. stock selloff and fall in the dollar boosted prices, but Asian markets were mixed. This pared back the precious metal’s gains.

Gold futures fell 0.82% to $1,948.10 by 12:06 AM ET (5:06 AM GMT).

U.S. tech stocks continued their second week of selloffs on Thursday. This was combined with a drop in the dollar to give gold prices an overnight boost to $1,970.85.

However, morning trading in Asia dragged the yellow metal back down to under the $1,950 mark. The safe-haven dollar fell due to further increased gains in the euro after the European Central Bank latest policy announcement.

This policy and a stalemate in the U.S. Congress over pandemic relief funding lent weight to gold’s rise.

Oil fell in morning trade, with Brent oil futures losing ground to fall below $40.00. This was on reports of a rising U.S. crude inventory and continuing lack of global demand.

The euro rose sharply after ECB President Christine Lagarde’s announcement of the latest policy. However, the U.K.’s continued intransigence on Brexit pulled the pound even further down. It has brought it to levels not seen since 1985, barring the 2016 anomaly.

Global COVID-19 cases continue to rise, with over 28 million COVID-19 cases globally as of September 11. This is according to Johns Hopkins University data.

The increasing number of virus cases leaves hopes of a faster economic recovery still intangible.

Oil and Gold Volatility: More Opportunities Than Risks

Most major movers in commodities in 2020, are expected to continue taking the spotlight until the close of this year. These include  precious metals like gold and oil.

Traders are looking for signs of economic recovery, and are assessing the effects of the health crisis on demand.

Alissa Corcoran, director of research at Kopernik Global Investors, said

many commodities are trading well below their long-term incentive prices. As long as they continue to be in demand, however, these prices aren’t sustainable. A move to their “incentive prices” would motivate spending to keep the supply in line with demand.

Commodity news says, energy commodities are some of the biggest losers. The US benchmark West Texas Intermediate crude is down almost 40% this year. Its prices have dropped significantly due to corona-related lockdowns reducing demand massively.