September 29, 2016
Gold Steady as Dollar Sags After OPEC Deal
(Reuters) - Gold edged up on Thursday as the U.S. dollar weakened in the wake of an oil producer agreement to curb output.
Division between Federal Reserve policymakers on when to raise U.S. interest rates has sapped investor enthusiasm for trading on comments by officials from the central bank.
"The gold and dollar markets are currently without very strong direction. The mixed views from U.S. Fed officials have weakened their credibility and the market has stopped buying (on) their comments," said Jiang Shu, chief analyst at Shandong Gold Group.
"For now, we can see gold move in the band of $1,300 to $1,350."
Spot gold had risen 0.3 percent to $1,325 an ounce by 0345 GMT. U.S. gold futures were up 0.4 percent at $1,328.60 an ounce.
The Organization of the Petroleum Exporting Countries on Wednesday agreed modest oil output cuts in the first such deal since 2008, with the group's leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low crude prices.
Oil futures extended gains on Thursday after rising nearly 6 percent the day before on the surprise OPEC move.
"Further oil price rallies may feed more convincingly into the gold market, especially if other non-oil commodities also rally, and the broader commodity indices, such as the GSCI, rise," HSBC analyst James Steel said in a note.
The gold market will absorb another raft of U.S., European and Japanese economic data on Thursday, he said. U.S. GDP numbers are due, as well as European Union business confidence data.
"We think prices may stay on the defensive in the absence of new developments, unless oil prices continue to rise enough to lend support to bullion."
The dollar index, which measures the greenback against a basket of currencies, fell as much as 0.1 percent to 95.338.
Silver was up 0.4 percent at $19.24 an ounce. Platinum and palladium rose over 1 percent to $1,033.99 and $717 respectively. Palladium earlier touched its highest in over seven weeks at $721.30.