US gold futures inched up in thin rangebound trading Thursday morning despite a higher dollar as oil prices rose after Opec agreed to a further production cut.
At 11:00 am EST (1600 GMT), benchmark February gold at the COMEX division of the New York Mercantile Exchange was up 50 cents at $632.90 an ounce, trading a four-dollar range between $629.20 and $634.00.
One metals futures broker said the gold market was quiet with very thin volume as many investors have closed their books for the year. "I think the only thing that can move gold higher is if crude oil can continue to move higher," he said. Oil gained more than a dollar after Opec decided to cut an additional 500,000 barrels per day, or two percent, of its output, starting February.
Opec's action came a day after a US government report showed the country's crude oil stockpile fell sharply last week, much more than analyst expectations. Gold is generally seen as a hedge against oil-led inflation. "We seemed to be stuck between $630 to $635 for the last three days. With the dollar halting its recent fall, gold's pretty much done the same thing," said the broker.
Gold has been supported by expectations of higher energy prices and, as a result, greater inflation. But there was more crude supply than people had thought, Daly contended. He expected silver to head into a correction, as the precious metal was solely supported by speculative moves by exchange-traded funds and lacked physical demand.
Spot gold bullion was quoted at $628.10/629.60, slightly up from $628.00/629.50 late Wednesday. Bullion dealers put London's fix at $627.40. NYMEX March silver climbed 7.5 cents to $13.990 an ounce, traded between $13.880 and $14.030. Spot silver was quoted at $13.810/13.880, up from Wednesday's late quote at $13.750/13.820. Thursday's fix was $13.770.
NYMEX January platinum was up $9.10 at $1,116.90 an ounce. Spot platinum fetched $1,108.00/1,113.00. March palladium gained $2.05 to $331.75 an ounce. Spot palladium traded at $328/332.
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