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Gold Rises As Dollar Drags Down 

Gold rose on Tuesday morning in Asian commodities as the dollar headed down. The yellow metal has gone up by 1% after the USD had its worst day in a fortnight.

Asian trading pushed gold even higher as the currency differential came into full effect. This makes it cheaper for currencies other than the dollar.

Gold futures gained 0.61% to $1,975.75, a 12-day high.

The Dow Jones rose in anticipation of a COVID-19 vaccine. NASDAQ returned a small amount of territory after its recent major falls but was flat at best.

Asian markets were down as investors waited on the outcomes of a U.S. Federal Reserve policy meeting, due Thursday. Investors waited for policy decisions from both the Bank of England and the Bank of Japan, also due on Thursday.

Gold gained an advantage from this interval, but the precious metal was mostly driven by a rapidly falling dollar.

The Senate Banking Committee said Fed Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin will be testifying. That will be before the committee on COVID-19 relief.

Brexit continues on a path of uncertainty with the U.K. Parliament voting for measures likely to breach international law. That’s over the Republic of Ireland and Northern Ireland’s shared border.

 

Gold & Oil Commodities

In energy commodities, Brent crude stays below $40 per barrel. This is despite a slight rise, as investors await  results from this week’s OPEC+ meeting.

OPEC previously reduced its demand forecasts and warned of continuing oversupply, as Libya reopens its oil facilities. These factors are also encouraging for gold’s prospects.

The rise in COVID-19 cases and the accompanying reduction in global economic activity remain as a headwind for gold’s value.

Elsewhere in commodity news, Royal Dutch Shell sees its liquefied natural gas as core to its long term plans. This also includes its “new energy” acquisitions, the Australian unit’s chairman said on Tuesday.

Europe’s biggest oil company aims for net zero emissions from its operations by 2050 and plans a major restructuring. Shell still sees gas as a crucial part of the puzzle. It has around a quarter of its gas assets in Australia.

In July, Shell booked $11 billion in writedowns on its gas business. This was mostly on its Australian Prelude floating LNG (liquefied natural gas) and QGC business. And that was after cutting its long-term oil and gas price outlook.

Shell acquired QGC, with its $54 billion takeover of BG Group in 2016. It produces gas in the northeastern state of Queensland and runs the Queensland Curtis LNG plant. It’s biggest contributor to Shell’s 35.6 million tonnes of LNG output in 2019.

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