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Gold & Crude Oil Fall During Wednesday’s Asian Session

December 2, 2020 at 7:31 by Vladimir Vyun

Futures for gold and crude oil fell during the Asian trading session on Wednesday. That was an uncommon phenomenon as crude, being a growth-related commodity, and gold, being a safe-haven commodity, usually trade inversely to each other. But they both had their own reasons to fall.

Gold rallied 2% yesterday after falling initially. But today, the yellow metal trades with losses. The likely reason for that was the optimism surrounding the coronavirus vaccine development. Traders, who feel optimism, are less likely to acquire bullion, which is often used as a protection against risk. Some analysts also cited the outlook for fiscal stimulus in the United States as another reason for the metal’s weakness. But others argued that it is still far from certain whether US politicians will be able to agree on a relief package, and its size may be not enough to propel the US economy anyway. Futures for delivery of gold in February dropped by $3.6 (0.2%) to $1,815.3 per troy ounce as of 7:21 GMT on COMEX today. Silver for delivery in March declined by $0.21 (0.87%) to $23.88 per ounce.

Meanwhile, crude declined after data from the American Petroleum Institute showed a surprise build of US inventories. Stockpiles grew by 4.1 million barrels last week, whereas market participants were expecting a drop of about 2.4 million barrels. Later today, the Energy Information Administration will release its estimate of US oil reserves. Analysts predicted ahead of the report that it will show a drop of 1.7 million barrels. Crude also remained under pressure from the disagreement among the OPEC+ members about whether they should extend their oil production cuts for several months or start gradually increase output in January. Contract for delivery of WTI crude oil lost $0.29 (0.65%) of its value to trade at $44.26 per barrel on NYMEX. February Brent crude declined by $0.24 (0.51%) to $47.18 per barrel on ICE.

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