Gold Holds Firm as Investors Await Index Adjustments and US Economic Reports

Gold and Silver Markets Hold Steady Amid Index Rebalancing

Gold prices stabilized after nearly a 1% decline in the previous trading day, as investors awaited both the annual adjustment of commodity indexes and the release of significant US economic indicators.

Gold hovered close to $4,455 per ounce. Starting Thursday, passive investment funds are expected to begin selling precious metals futures to align with the updated index weightings. This year’s sales are anticipated to be larger than usual, following strong rallies in both gold and silver over the past year.

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Silver, which dropped 3.8% on Wednesday, faces heightened risk of a sharp downturn due to its recent price swings. Citigroup projects that approximately $6.8 billion in silver futures may be sold during the rebalancing, representing about 12% of the open interest on the Comex exchange.

Kenny Hu, a strategist at Citigroup, remarked, “In all my years overseeing this process, I haven’t witnessed flows of this magnitude.”

These estimates are based on funds that track the Bloomberg Commodity Index and the S&P Goldman Sachs Commodity Index. Citigroup also predicts that gold futures outflows will closely follow those of silver, with both metals seeing estimated sales of around $6.8 billion.

Both gold and silver recently achieved their strongest annual gains since 1979, repeatedly setting new records last year. These gains were fueled by central bank purchases and increased investment in bullion-backed exchange-traded funds. Recent geopolitical developments, such as tensions between China and Japan and the US capture of Venezuelan leader Nicolas Maduro, have further supported gold prices, which remain up about 3% for the week.

Silver’s surge has been even more dramatic, soaring roughly 150% in 2025. By Wednesday’s close this week, silver had already climbed 7.4%. The market experienced a historic short squeeze in October, and the metal has also benefited from speculation that the US government may eventually introduce import tariffs.

According to David Wilson, head of commodity strategy at BNP Paribas SA, the index rebalancing may limit silver’s short-term gains, but he believes the metal has strong long-term momentum.

Market participants are also closely watching for key US economic data set to be released on Friday, including the December employment report. Weaker numbers could strengthen expectations for further Federal Reserve interest rate cuts, which would be favorable for non-yielding assets like gold and silver.

As of 9:34 a.m. in Singapore, gold had dipped 0.1% to $4,452.63 per ounce, while silver advanced 0.7% to $78.72. Platinum recovered some of its previous losses, and palladium also gained ground. The Bloomberg Dollar Spot Index remained steady after a 0.1% rise in the prior session.

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Bloomberg Index Services Ltd., a subsidiary of Bloomberg LP, manages Bloomberg Indices.

Reporting assistance by Jack Ryan.

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