Gold Slides: Index Rebalance & Dollar Gains Pressure
Gold prices weakened on Thursday as market participants braced for potential selling in futures contracts related to the commodity index rebalancing, while a stronger US dollar added pressure by making gold more expensive for non-dollar buyers.
XAU/USD was around $4,431/oz, down about 0.5%. For other metals, XAG/USD was around $76.1/oz, down about 2.6%, Platinum (XPT/USD) was around $2.22,000/oz, and Palladium (XPD/USD) was around $1.76,000/oz.
The main trigger was the annual commodity index weighting adjustment (rebalancing) taking place in the next few days, leading the market to anticipate movements in passive funds that would need to adjust their positions—and this often creates short-term "noise" in gold/silver.
From a macro perspective, the dollar held firm ahead of the release of the US Nonfarm Payrolls (NFP). The latest US data shows mixed signals: service activity is improving, but labor indicators (such as job openings) are weakening—leading the market to continue weighing the possibility of an interest rate cut this year.
Amidst this, geopolitical factors remain a supportive layer, including developments related to Venezuela. However, today, the combination of rebalancing flows and a strong dollar is more dominantly pressuring precious metals, so volatility remains potentially high until the NFP data is released.
Source: Newsmaker.id
