Market News

BY  Yihui Xie and Preeti Soni

(Bloomberg) -- Gold declined, as traders looked beyond heightened geopolitical tensions to US economic data releases due this week.

Bullion was near $4,470 an ounce, having risen more than 4% over the previous three sessions. President Donald Trump said Venezuela would hand over as much as 50 million barrels of oil to the US, while the White House refused to rule out military force to acquire Greenland. China, meanwhile, imposed controls on exports to Japan with any military use.

While the geopolitical landscape remains fragile, traders are turning their attention to a busy lineup of US economic data, including the December jobs report due Friday. A gauge of manufacturing activity came in weaker than expected on Tuesday, bolstering hopes that the Federal Reserve will cut interest rates again.

Adding to these expectations, Fed Governor Stephen Miran said the US central bank would need to cut interest rates by more than a percentage point in 2026, telling Fox Business Network that monetary policy is restraining the economy. Three successive rate cuts last year were a tailwind for precious metals, which don’t pay interest.

Gold is fresh from posting its best annual performance since 1979, hitting a series of record highs last year with support from central-bank buying and inflows to bullion-backed exchange-traded funds. Silver’s rally was even more spectacular — the white metal surged nearly 150% — as it also benefited from a shortage of metal and the possibility of US import tariffs.

Silver fell as much as 2.2% on Wednesday, but has still rallied 12% so far this year, with the retail investor appetite, particularly in China, boosting demand.

There are some near-term concerns that a broad rebalancing of commodity indexes may act as a drag on precious metals, with passive tracking funds prompted to sell to match new weightings. Citigroup Inc. estimated there would be outflows of $6.8 billion from gold futures contracts and roughly the same amount from silver as a result of the re-weighting of the two largest commodity indexes.

Gold declined 0.6% to $4,466.04 an ounce as of 12:37 p.m. in Singapore. Silver reversed earlier gains to fall 1.9% to $79.6933 an ounce. Platinum plunged 4.2%, while palladium lost 2.9%. The Bloomberg Dollar Spot Index, a gauge of the US currency’s strength, skipped 0.1%.