Gold and Silver Prices Steady Amid Anticipation of Important US Data

SadaNews - Gold steadied after a nearly 1% decline in the previous session, just ahead of the annual rebalancing of commodity indices, and before major US economic data is released.

The precious metal was trading near $4,455 per ounce, as passive index-tracking funds are expected to start selling futures contracts of precious metals on Thursday, to align with the new weights imposed by the indices. Sales are expected to be greater than usual due to the sharp price increases seen in gold and silver over the past year.

Silver, which dropped 3.8% on Wednesday, is more susceptible to sharp sell-offs in light of its recent volatility. Citigroup estimated that about $6.8 billion worth of silver futures contracts may be sold due to rebalancing, which represents roughly 12% of the total open contracts on the COMEX exchange.

Kenny Ho, a strategic analyst at Citigroup, stated: "I have been managing this process for many years, and we have never seen exceptional flows of this magnitude before."

Index Rebalancing and Short-term Pressures

The bank's estimates are based on funds tracking the "Bloomberg Commodity Index" and "S&P Goldman Sachs Commodity Index." Outflows from gold futures contracts are expected to follow silver sales directly, also estimated at around $6.8 billion, according to Citigroup.

Gold and silver recorded their best annual performance since 1979 after reaching a series of record levels last year, supported by central bank purchases and investment flows into bullion-backed exchange-traded funds.

Additionally, escalating geopolitical tensions, including trade relations between China and Japan, and the U.S. arrest of Venezuelan President Nicolás Maduro, have provided additional support for gold in recent days, which remains about 3% higher since the start of the week.

Silver's surge, which jumped about 150% during 2025, was sharper than gold. Just this week, it had increased by 7.4% by the close of Wednesday's session. The market experienced historic "sell pressure" last October and benefited from fears of potential future tariffs imposed by the U.S. administration on imports.

David Wilson, commodities strategy director at BNP Paribas, stated that index rebalancing may "limit upside opportunities in the short term, but in the long term, silver still holds greater momentum."

Anticipation for Major Economic Data

At the same time, traders are turning their attention to the release of major U.S. economic data on Friday, including the jobs report for December. A weaker reading could bolster bets for further interest rate cuts by the Federal Reserve, supporting non-yielding precious metals.

Gold dropped 0.1% to $4,452.63 per ounce at 9:34 a.m. Singapore time. Silver rose 0.7% to $78.72. Platinum partially recovered from its losses recorded on Wednesday, while palladium increased. The Bloomberg Dollar Index remained relatively stable after ending the previous session up by 0.1%.