Gold prices also have beaten higher before US inflation data that could affect Fed's policy.

Top oil importer China is reopening its economy after the end of strict Covid-19 curbs.
Top oil importer China is reopening its economy after the end of strict Covid-19 curbs. (Reuters Archive)

Oil prices rose, building on gains in the previous session as China's demand outlook improves and concerns rise over the impact of sanctions on Russian supply.

Brent crude rose 50 cents, or 0.6 percent, to $83.17 per barrel by 0135 GMT, while US West Texas Intermediate crude also rose 50 cents, or 0.7 percent, to $77.91 per barrel in early trade on Thursday.

Both benchmarks rose 3 percent in Wednesday's session, settling at the highest levels since December 30.

Top oil importer China is reopening its economy after the end of strict Covid-19 curbs, boosting optimism that demand for fuel will grow in 2023.

China's industrial output is expected to have grown by 3.6 percent in 2022 from the previous year, the Ministry of Industry and Information Technology said, despite production and logistics disruptions from Covid-19 curbs.

The market is bracing for additional curbs aimed at Russian fuel products sales set to come into force in February as the European Union (EU) keeps working on more sanctions against Moscow over its attack on Ukraine.

The US Energy Information Administration said the upcoming EU ban on seaborne imports of petroleum products from Russia on February 5 could be more disruptive than the EU ban on seaborne imports of crude oil from Russia implemented in December 2022.

READ MORE: Asian markets extend rally, oil edges up on China reopening

Gold rises before US inflation announcement

Gold prices ticked higher on Thursday, aided by a softer dollar, while market participants awaited key US inflation data that could influence the Federal Reserve's policy path.

Spot gold was up 0.4 percent to $1,883.95 per ounce, as of 0309 GMT. US gold futures also rose 0.4 percent to $1,886.50.

The dollar index dipped 0.1 percent, while benchmark US 10-year Treasury yields also fell. A weaker dollar makes greenback-priced bullion more appealing to other currency holders.

"Gold prices are very well supported as the dollar has weakened. However, on a technical front bullion is seeing some resistance around $1,880 levels and thus it has been consolidating in a range since few days," said Ajay Kedia, director at Kedia Commodities, Mumbai.

If the inflation report is supportive for gold, then prices could move up to $1,900 level, but there might be some profit booking after that, Kedia added.

READ MORE: Gilded Age: Why Russians are hoarding gold

Source: Reuters