Gold Steadies After Overnight Drop and Bounce

Gold was down on Wednesday morning in Asia after a steep drop and then recovery during the previous session. The recovery was sparked by major selloffs in stocks.

Gold futures were up 0.32% at $1,937.05 by 12:39 AM ET (5:39 GMT) after seeing both a peak of $1,947.70 and a trough of $1,914.55 on Tuesday, but looked likely to rise on the news of a continued stocks rout.

Gold’s fall, bounce and flatten is tied to a second U.S. big tech stocks record-breaking fall, which caused U.S. markets to plunge. Asian markets followed suit in morning trading. This comes amid the mixed messages of a rising dollar, further outbreaks of COVID-19, and yet more Brexit uncertainties caused by the U.K. reportedly planning to break international law over the country’s exit from the E.U.

The overnight rise in gold at the same time as a lift in the dollar is unusual, as one generally falls as the other gains.

Oil has also extended its three-months fall withBrent oil futures now going for under $40 a barrel for the first time since June as demand concerns continue to dog the market. Asian demand expectations are also causing drag, with only four of ten refineries suggesting that they would raise their purchases of Saudi oil, even at these prices, according to a Bloomberg survey.

Gold, a safe-haven popular during times of social and economic uncertainty, has seen substantial price increases since the onset of the COVID-19 pandemic with prices topping out above $2,072 in August.