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Gold rebounds as US dollar wanes after oil advances on Opec accord
[MELBOURNE] Gold rose as the US dollar extended losses following an agreement by Opec to limit production for the first time in eight years.
Bullion for immediate delivery rose as much as 0.3 per cent to US$1,325.96 an ounce, and was 0.1 per cent higher at US$1,323.29 an ounce as of 11:16am in Melbourne, according to Bloomberg generic pricing. The Bloomberg Dollar Spot Index held losses after tumbling Wednesday to a third straight daily decline.
The metal has rallied 25 per cent in 2016, rebounding from three years of losses, as low or negative interest rates bolster demand. The greenback fell against currencies of crude-producing countries after the Organization of Petroleum Exporting Countries agreed to a preliminary deal to reduce production. A Bloomberg index of the US dollar's strength is down about 0.4 per cent this quarter.
"Clearly there's some influence from Opec, though the relationship between gold and crude oil is not as influential as the relationship between gold and the dollar," said Barnabas Gan, an economist at Oversea-Chinese Banking Corp in Singapore.
Holdings in exchange-traded funds backed by gold rose 0.5 metric ton to 2,032.2 tons as of Wednesday, data compiled by Bloomberg show.
Silver rose 0.8 per cent, while platinum and palladium both advanced one per cent.