Gold prices fell on Friday, and pulled back from a 4-week high on profit-taking, but remain on the cusp of the third straight weekly gain as the US dollar fell against a basket of currencies.

Gold prices fell 0.4% to $1,877.46 an ounce, after opening $1,885.70, and hit a high of $1,886.68.

The yellow metal closed higher by 1.1% yesterday, and posted the third straight daily gain and a 4-week high of $1,896.24 as the US dollar fell.

Gold prices gained 2% so far this week, to head for the third straight weekly gain.

The US dollar index yesterday hit the lowest level in two and a half years at 89.73 points.

A drop in the US currency lifts the dollar-denominated gold prices, making them cheaper for other currencies holders.

The greenback fell sharply due to slowdown in demand as the US Congress is close to passing the new fiscal stimulus in the US, and the Federal Reserve pledged to continue purchasing bonds to support the economy.

The US Congress is close to passing a $900 billion fiscal stimulus package to mitigate the pandemic economic impact.

The US Federal Reserve kept the interest rate today unchanged between zero and 0.25%, and pledged it would continue its monthly purchases of bonds until substantial further progress is made.

Gold stocks at the SPDR ETF fell 2.33 metric tonnes yesterday, with the total at the lowest level since June 22 at 1,167.82 MT.

Oil prices fell on Friday, and pulled back from the 9-month high hit yesterday, while on the cusp of the first daily loss in 5 days due to profit-taking and corrections, but still marching toward the seventh straight weekly gain, in the longest weekly gaining streak since March 2019.

US crude fell 0.5% to $48.12, after opening at $48.36, and hit a session high of $48.42, and Brent crude fell 0.7% to $51.16 a barrel, after opening at $51.51, with a high of $51.52.

US crude gained 1.1% yesterday, its fourth straight daily gain, and hit a 9-month high of $48.58 a barrel, and Brent crude futures rose 0.9%, and hit the highest since last March at $51.88.

Yesterday's gains came thanks to a drop the US crude inventories fell and production slowed, while the US dollar fell sharply against its counterparts.

Oil prices are still 3.5% higher so far during this week, on the cusp of the seventh straight weekly gain, in the longest weekly gaining streak since March 2019.

This week's gains came based on the positive developments about the Covid-19 vaccines, while concerns about the US oversupply eased, and the sharp drop in the US dollar.

Six countries have launched massive vaccination campaigns using the vaccine developed by Pfizer and the German firm BioNTech, after authorities approved the emergency use of the vaccine.

These countries are the US, Britain, Canada, Mexico, Saudi Arabia and Bahrain, and the European Medicines Agency is expected to approve the emergency use of the vaccine in Europe this week or next week at most.

Vaccination of the Chinese vaccine candidate developed by Sinopharm company began in many countries in Asia and the Middle East.

The widespread vaccination in most parts of the world would help in containing the global pandemic that has hit demand for fuel.

These developments raised prospects for fuel demand to improve after the expected easing of lockdown restrictions following the widespread use of vaccines.

The US Energy Information Administration reported on Wednesday that crude inventories fell 3.1 million barrels during the week ending December 11, while analysts forecast a drop by 2.8 million barrels.

The US production fell about 100,000 barrels last week, to a total of 11.0 million barrels per day, the first weekly drop since the week ending on October 30.

Withdrawing from the US inventories while production slowed, eased fears of oversupply in the world's largest consumer and producer of oil.

Oil prices are also being lifted by the sharp drop in the US currency, making the dollar-denominated prices of commodities cheaper for other currencies holders.

Asian stock indices opened the fifth session of the week mixed, with Japan, Australia, New Zealand, and Hong Kong lower, while China, and South Korea gained ground. 

From New Zealand, the trade surplus rose to 252 million dollars compared to a deficit of 472 million in October. 

From Japan, consumer prices are expected down 0.9%, while core prices are estimates down 0.9% as well expected. 

Bank of Japan voted at it December 17-18 meeting to maintain interest rates at negative 10% as expected. 

Japan's TOPEX fell 0.04%, while Nikkei 225 declined 0.19% to 26,756. 

China's CSI 300 rose 0.03%, while Shanghai added 0.13% to 3,409. 

Hong Kong's Hang Seng shed 0.73%, while South Korea's KOSPI rose 0.07% to 2,772. 

New Zealand's NZX 50 fell 2.05%, while Australia's S&P/ASX 200 fell 0.91% to 6,695. 

Euro fell on Friday against dollar away from 2-1/5 year highs and on track for the first loss in five days on profit-taking, while still heading for a weekly profit on strong sentiment. 

EUR/USD fell 0.2% to 1.2238, after closing up 0.6% yesterday, marking 2-1/5 year peak at 1.2272. 

The common currency is up 1.2% so far this week on track for the fourth weekly profit in five.

The gains came following a string of positive euro zone data this week and hopes for an EU-UK trade deal. 

Germany's manufacturing sector grew by the best pace in over two years, dissuading concerns of a collapse in economic recovery in Europe due to the coronavirus second wave. 

Otherwise, EU-UK negotiators decided to extend the deadline for talks in hopes for reaching a final hour deal. 

US Congress is also expected to pass $900 billion in new stimulus if Both Democrats and Republicans agreed on the final details.