Gold Holds at $4,455, Markets Wary of Index "Selling Wave"
Gold prices are holding steady after dropping nearly 1% in the previous session, ahead of two major market-moving events: the annual rebalancing of commodity indexes and the release of important US economic data.
On Thursday morning, gold was hovering around $4,455 per troy ounce. The price stability is due to market participants awaiting the actions of passive tracking funds, which must adjust their portfolios to reflect the new index weightings—usually through precious metal futures transactions.
The greatest pressure is expected to fall on silver, which fell 3.8% the day before and is known to be more volatile. Citigroup estimates that potential silver futures sales will be around $6.8 billion, equivalent to approximately 12% of Comex open interest, making the risk of a sudden selloff higher than usual.
This weighting adjustment comes after gold and silver recorded their best annual performance since 1979 and repeatedly hit records throughout the year, supported by central bank buying and inflows into bullion-based ETFs. In recent days, gold has also received support from rising geopolitical tensions—including the China-Japan trade dispute and news related to Venezuela—which have kept the price up around 3% this week.
In addition to rebalancing, market focus is also on Friday's US economic data, particularly the December jobs report. If the results are weaker, expectations of a Fed interest rate cut could strengthen—usually a boost for gold and silver, as neither offers an interest-bearing yield.
Key Points (5 Points):
- Gold is stable around $4,455/oz after falling nearly 1% in the previous session.
- The market is bracing for a commodity index rebalancing that could trigger selling in precious metals.
- Silver is most vulnerable due to its volatility and has only fallen 3.8%; the potential for futures selling is expected to be substantial.
- Estimated outflows: approximately $6.8 billion from silver futures, followed by approximately $6.8 billion from gold futures.
- The next direction will also be determined by US jobs data (Friday): weak data could strengthen the case for a rate cut and support precious metals.(asd)
Source: Newsmaker.id
