Gold prices near $4,466 per ounce

SadaNews - Gold prices have decreased at a time when traders are looking beyond rising geopolitical tensions, anticipating the release of U.S. economic data this week.

The precious metal traded near $4,466 per ounce, after rising more than 4% in the previous three sessions. U.S. President Donald Trump stated that Venezuela would supply up to 50 million barrels of oil to the United States, while the White House dismissed the idea of ruling out military force to seize Greenland.

Meanwhile, China imposed export restrictions on Japan for any goods that could have military uses, exacerbating the dispute between the two largest economies in Asia.

Anticipation of U.S. data overshadows geopolitical risks

Although the geopolitical landscape remains fragile, traders are shifting their focus to a busy schedule of U.S. economic data, including the jobs report for December set to be released on Friday. A manufacturing activity index was weaker than expected on Tuesday, bolstering hopes that the Federal Reserve would again cut interest rates.

Statements from Federal Reserve Board member Stephen Miran reinforced these expectations, as he stated that the U.S. central bank would need to cut interest rates by more than one percentage point in 2026, arguing that monetary policy is constraining the economy.

Three consecutive interest rate cuts last year supported precious metals, which yield no return.

Record rise for gold and silver throughout last year

Gold recorded its best annual performance since 1979, reaching a series of record levels throughout last year, supported by central bank purchases and inflows into gold-backed exchange-traded funds.

The rise of silver was even more remarkable last year, as the white metal surged nearly 150%, also benefiting from supply shortages and the possibility of U.S. import duties keeping large quantities reserved in New York.

On Wednesday, the price of silver dropped by up to 2.2%, but it was still up 12% since the beginning of this year, with retail investor interest, particularly in China, contributing to increased demand for it.

Concerns that may pressure prices

However, some short-term concerns emerge that a broad rebalancing of commodity indices could pressure precious metals, as passive funds tracking indices may be forced to sell some contracts to align with new weights.

Citi Group estimated outflows of $6.8 billion from gold futures contracts, and nearly the same amount from silver, due to the reweighting of the two largest commodity indices.

Gold fell by 0.6% to $4,466.04 per ounce by 12:37 p.m. Singapore time. Silver relinquished earlier gains, dropping 1.9% to $79.6933 per ounce.

Platinum also plunged 4.2%, while palladium lost 2.9%. The Bloomberg Dollar Spot Index, which measures the strength of the U.S. dollar, declined by 0.1%.