Gold prices are holding steady after dropping nearly 1% in the previous session. The market is now holding its ground while awaiting two major events: the release of US employment data and the annual commodity index rebalancing process.

On Thursday morning, gold held around US$4,460 per troy ounce. This "calm" movement is understandable, as many market participants are choosing to wait for a new direction before taking large positions.

The main focus comes from the rebalancing of the global commodity index. A number of passive tracking funds are expected to begin selling precious metal futures contracts to align their portfolio composition with the new weightings assigned to the index.

The potential for selling this time is predicted to be greater than usual, as precious metal prices have surged strongly over the past year. This has caused the weighting of precious metals in the index to swell, necessitating a reduction through selling to restore balance.

Meanwhile, the market is also eyeing US economic data on Friday, particularly the December jobs report. If the data is weaker than expected, the likelihood of an interest rate cut could strengthen—and this is usually a welcome change for assets like gold, which do not yield interest.

In other metals markets, silver rebounded after a sharp fall the previous day. Platinum also attempted to recover, while palladium strengthened. The dollar's movement is also a concern as it could impact the appeal of precious metals.

Key Point:

Gold stabilized at US$4,460/oz after previously falling almost 1%.

The market is awaiting a rebalancing of commodity indices and US employment data.

Passive funds are expected to sell precious metals futures to adjust index weightings.

Selling is expected to be greater because precious metals have risen sharply over the past year.

Weaker US jobs data could boost expectations of a rate cut, which typically supports gold. (asd)

Source: Newsmaker.id