Gold prices fell on Thursday as investors braced for futures selling tied to a commodity index reshuffle, with a stronger US dollar adding pressure by making the metal costlier for overseas buyers.

Spot gold fell 0.6% to US$4,427.48 per ounce, as of 0921 GMT. US gold futures for February delivery fell 0.6% to US$4,435.40.”Gold and silver remain under pressure as the annual commodity-index rebalancing gets underway.

Over the next five days, COMEX futures could see selling in the region of US$6 to US$7 billion (RM24.4 to RM28.4 bilion) in each metal,” said Ole Hansen, head of commodity strategy at Saxo Bank.

The annual Bloomberg Commodity Index rebalancing aims to keep the index aligned with the current state of the global commodity market.

This year’s window runs from Jan 9-15.”(The US-Venezuela conflict) added a small georisk premium at the beginning of the week which is now deflating as the attention turns to the rebalancing,” Hansen added.

Meanwhile, the US dollar hovered near a one-month high as investors assessed mixed economic data ahead of Friday’s nonfarm payrolls report.

Data on Wednesday showed US job openings dropped to a 14-month low in November while hiring resumed its sluggish tone, pointing to ebbing labour demand.Investors are now awaiting the US non-farm payrolls data for more clues on monetary policy, with markets pricing in two interest rate cuts by the Federal Reserve this year.

On the geopolitical front, the US seized two Venezuela-linked oil tankers in the Atlantic Ocean on Wednesday.

Spot silver lost 3.1% to US$75.73 per ounce, after hitting an all-time high of US$83.62 on Dec 29.

Source: theedgemalaysia