Gold prices rose to a five-week high yesterday as oil prices tumbled and markets reassess the outlook for the United States economy.
Spot gold was up 0.9% at $US1183.60 ($NZ1687.16) an ounce, its highest level since December 5.
The metal posted its biggest weekly increase in two months last week, after sliding more than 12% in the last quarter, on the expectation US president-elect Donald Trump's tax-and-spending policies would boost the dollar and inflation and prompt more interest rate rises.
A slight fall in yields and a small dip in the value of the US dollar, along with weaker share prices, were enough to support gold, which was starting to benefit from greater stability in emerging markets, HSBC Securities chief metals analyst James Steel said.
Strong outflows from gold-backed exchange-traded funds had also lessened of late. Seasonal buying in the big Asian gold markets had been strong, as India was deep into the wedding season and Chinese New Year was approaching.
US crude futures were down $US2.03 at $US51.96 a barrel, and Brent futures had fallen $US2 to $US54.94 a barrel.
In Iraq, Opec's second-biggest producer, oil exports from the southern Basra ports reached a record high of 3.51million barrels per day (bpd) in December, the oil ministry said.
Opec members agreed in November on the first deal to cut oil output since 2008, limiting supplies to 32.5 million bpd for the first six months of the year.
Mizuho Securities USA futures division director Robert Yawger told Reuters the large volumes from Iraq implied the country might be the first crack in the wall of the Opec agreement.
The Kuwait oil minister said an Opec committee would meet in Vienna on January 21 and 22 to monitor compliance and agree on a final monitoring mechanism.
Last week, US energy companies added oil rigs for the 10th week in a row. Analysts now expect the US rig count to rise to between 850 and 875 by the end of the year.
Dealers say the recent rise in US shale hedging to protect future output for 2018 and beyond could inject more pressure into the market. High inventories in the US were still a hurdle for the market.
Zinc rose to its highest level in three weeks yesterday as the US dollar fell and on expectations of a continued shortage in supply for the metal, which is used to galvanise steel.
Zinc, the best performing metal on the London Metal Exchange, rose 60% in 2016, fuelled by fears of shortages after some major mines were closed or suspended.
Among other metals, copper closed flat at $US5591 per tonne. Aluminium rose 0.8% to $1727 a tonne, not far off a two-month low hit last week. Lead closed 2.6% higher at $US2108 a tonne and nickel rose 1.4% to $US10,390 a tonne.
