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Gold drops as US jobs data weighs ahead of commodity index adjustments
As commodity index readjustments, and a strong dollar kept the pressure on prices. Investors were positioning themselves ahead of important U.S. Non-Farm Payrolls Data due later that day. As of 0536 GMT spot gold was down 0.2% to $4,469.03 an ounce, but it still had a weekly gain of more than 3%. Bullion reached a record-high of $4,549.71 in December. U.S. gold futures for delivery in February rose 0.4% to $4 477.70. The U.S. Dollar strength is a major driver of gold prices at the moment, ahead of the NFP data, said Ross Norman, an independent analyst. The U.S. Dollar advanced to a near-month high as traders prepared for the U.S. Supreme Court's decision on President Donald Trump using emergency tariff powers. The stronger dollar makes bullion priced in greenbacks more expensive for other currency holders. The economists predict modest growth in non-farm payrolls of 60,000 jobs and a slight decrease in unemployment to 4.5%, down from 4.6%. The Bloomberg Commodity Index Rebalancing, a periodic adjustment to commodity weightings in order to align the index with market conditions, begins this week. "At the start of the new year, several indexes reweight the amount of gold and precious metals in their portfolios. Norman said that, although there is a certain amount of weakness in the index rebalancing process, things are still largely positive. HSBC has said that gold prices could reach $5,000 per ounce by the first half 2026 due to rising geopolitical risk and debt. In a low interest rate environment, and during economic uncertainty, non-yielding investments tend to perform well. Silver spot fell 0.1%, to $76.83 an ounce, after reaching a record high of $83.62 per ounce on December 29. The white metal was expected to post a weekly gain of more than 6%. After reaching a record $2,478.50 per ounce on Monday, spot platinum fell 0.8% to $2250.30. Palladium remained steady at $1,785.25 an ounce. Both metals are also set to make weekly gains. Ishaan Nandy reported; Sumana Nandy and Ronojoy Mazumdar edited. Harikrishnan Nair was the editor.
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Fuel oil prices in Asia are higher than those in the West as more Venezuelan oil is diverted to the US
Friday, the premium for high-sulfur fuel oil in Asia over the West reached its highest level in eight months as traders expect more Venezuelan crude oil and fuel oil to be shipped to the United States than to Asia in the coming months. LSEG data show that the East-West 380cst HSFO swap for the first month of 2026, a measure used to compare HSFO prices in Asia, Europe and America, has risen above $27 a barrel, a price last seen in May 2025. This value has nearly doubled since the beginning of 2026. It is more profitable for traders to send fuel oil to Asia when the price differential widens. Last week, Donald Trump, the U.S. president, seized Venezuelan President Nicolas Maduro and declared that the U.S. would control Venezuela's oil industry. Secretary of State Marco Rubio stated that the U.S. will refine and sell 50 million barrels Venezuelan crude on Wednesday, while continuing to seize Venezuelan linked tankers. BEARISH US OUTLOOK Royston Huan is a fuel oil and feedstocks expert at Energy Aspects. He said that the increased availability of Canadian heavy crude for U.S. locations would add to the pressure on the U.S. Gulf Coast's HSFO market. Analysts at a U.S. refining company said that traders increased the East-West spread as U.S. market sentiment has turned negative due to the possibility of diverting more Venezuelan fuel and crude oil with high sulphur content into U.S. refueling stations, thus reducing the supply for Asia. VOLATILITY OF ASIAN RESIDENTS The volatility of HSFO future prices has been caused by the uncertain outlook for Venezuelan crude oil supplies in Asia. Singapore's balance-January/February spread flipped into backwardation ?on Wednesday, before swinging back into contango on Thursday. Backwardation is a market structure in which the current prices are higher than the future ones. This indicates a tighter supply. Contango is the opposite. According to LSEG and market sources, the spread flipped backwardation in early trading on?Friday. Some traders say that for now, the fuel oil price gains in Asia will be tempered by the large inventories in tanks on land and aboard ships. Due to Western sanctions, Chinese independent refiners are a major outlet for Venezuelan crude oil and fuel oil. Emril Jamil is a senior oil analyst with LSEG. He said that the loss of Venezuelan feedstock at a low price will affect refiners’ profitability and force them to reduce their refining rates or find alternative residual feedstocks.
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Stocks wait for the jobs report and tariff ruling
The dollar strengthened on Friday ahead of an important jobs report. Investors braced themselves for the Supreme Court's ruling on the legality President Donald Trump’s sweeping global tariffs, which shocked markets last year. The smoldering geopolitical tensions around the world have boosted oil prices as well as?as?defence stock, and traders will continue to weigh developments in Venezuela after U.S. troops captured Venezuelan president Nicolas Maduro Saturday. The possible U.S. Supreme Court decision on tariffs will dominate Friday's news. If the tariffs are removed, it could have a negative impact on government revenue. This would push Treasury yields up and create new waves of volatility in markets. Kyle Rodda is a senior financial market analyst at Capital.com. He said that the Supreme Court's ruling on Friday was the "real wildcard". If the courts overturned U.S. Tariffs, this would be a huge boost for the market. "A constraint could be that the Trump administration will not give in to the demands of the courts, and instead look for other ways to maintain levies." Traders are still hesitant to make bets before the events that will move the markets. MSCI's broadest Asia-Pacific share index outside Japan fluctuated between gains and losses, and was down by 0.2%. This is just below its record high from earlier in the week. European stock futures increased by 0.34%. Fast Retailing (the operator of Uniqlo) reported strong earnings, and the Nikkei gained 1.5%. S&P 500 closed flat on Thursday. However, the aerospace and defense index reached a record high. European defence shares also hit a new high. S&P futures were unchanged in the?Asian hour. U.S. JOBS RELEASE ON DECK Data from the United States on Thursday revealed that demand for labor remained low, and businesses were able to squeeze more out of their existing workforce. This has heightened interest in Friday's report on employment. The report will likely show that the labour markets are stuck in a mode economists and policymakers call "no fire, no hire". A survey by economists estimates that nonfarm payrolls increased by 60,000 last month, after recovering by 64,000 jobs in November. The economy lost 105,000 positions in October. This was the biggest drop in almost five years. Most of these were federal employees who deferred their buyouts. The Federal Reserve is expected to cut rates at least twice this year. However, a divided Federal Reserve indicated only one rate cut in December. At its meeting in this month, the Fed is expected keep rates unchanged. Rodda said that the markets would need to be sparked by a large surprise on the downside from the jobs report. A solid print will reassure investors that U.S. employment is in good shape and a small miss will only increase the chances of further rate cuts. The yield on the benchmark 10-year U.S. notes was 4.177%, up 4.5 basis points from the previous session. The dollar index (which measures the U.S. unit against six other currencies) hovered at a month-high against major currencies. Treasury Secretary Scott Bessent stated on Thursday that he expected Trump will make a quick decision on who will replace Jerome Powell when the Fed chairman's term expires in May. Markets expect the president to name a dovish nominee. The oil prices continued to rise?on Friday. They were near their two-week high, as investors worried about the situation in Venezuela, and also worried about supply from Russia, Iraq, and Iran. Two sources said that foreign embassies are arranging visits to Venezuela for next week, which will include representatives of U.S. oil companies and European oil firms. This follows Washington's announcement about a $2 billion deal for oil and the supply to Venezuela of U.S. goods. Brent futures increased 0.8%, to $62.49 a barrel. U.S. West Texas Intermediate crude oil also rose 0.8%, to $58.25. (Reporting and editing by Michael Perry, Shri Navaratnam and Ankur Banerjee from Singapore)
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Can the US price Greenland?
According to a White House spokesperson, despite Denmark's repeated assertion that Greenland was not for sale the U.S. president Donald Trump and his staff are "talking" about a possible?purchase. Even as a hypothetical thought experiment, assuming the presence of a seller willing to sell an autonomous territory like Greenland, the discussion quickly encounters imponderables. For example, how could a meaningful price be established? Nick Kounis is the chief economist at Dutch ABN AMRO Bank. He noted that there was no agreed framework for valuing nations. Finding historical benchmarks of fair value is also difficult. In 1946, the U.S. made an offer to Denmark of $100 million for the mineral-rich Arctic Island. The offer was turned down. This is about $1.6 billion in today's dollars. This figure is abysmally low, but it's not useful as a benchmark because the U.S. economy and the Danish economy have grown massively in the eight decades that followed. It does not reflect the relative "value" Greenland or its resources will have in the 2020s global economic environment. The purchase of Alaska by Russia in 1867 for $7.2 million and the $15-million purchase made by America of Louisiana in 1803, are not good precedents. The first and most obvious is that both France as well as Russia chose to sell. While it's clear that these figures would be much higher today, the amount of money would vary depending on factors such as inflation, land price appreciation, and local economic growth. What if it was a company? How about using a similar method to a valuation of an acquisition based on income that the target can generate? Still tricky. Denmark's central bank estimated that Greenland's fishing based Gross Domestic Products (GDP) would be $3.6 billion by 2023, about one tenth the size of Iceland's smaller Arctic neighbour. What multiple would you use to arrive at a price, even if this was the starting point of a valuation? What is your explanation for the fact the Danish subsidy covers about half of Greenland’s budget? It funds hospitals, schools, and infrastructure in the sparsely-populated territory. Trump denied that the U.S. was interested in Greenland's energy and mineral assets. However, it was reported last October by the media that his administration had held discussions regarding a stake purchase of Critical Metals Corp., a company looking to build Greenland’s largest rare earths project. Greenland has estimated mineral and energy resources worth hundreds of billions or more dollars. The entire island has not yet been subjected to proper geological studies, but a survey conducted in 2023 revealed that 25 of 34 minerals classified as "critical raw materials" (by the European Commission) were present. Companies in the mining and energy industries have been putting a price on assets all over the world for a long time. At least two complications arise in this case. Greenland has banned the extraction of natural gas and oil for environmental reasons. The development?of its mining industry is also hampered by red tape and opposition. Does the buyer want a discount because of a political restriction? How much discount would you like to get? Second, it is crucial that mining and energy deals do not involve the transfer of sovereignty. In this case, the Greenlandic Inuits assert their ownership rights. "Because of the intangible notions such as Indigenous peoples' history and culture, you can't price it - there's no way to do so," said Andreas Osthagen. Research Director for Arctic and Ocean Politics, Fridtjof Nansen Institute, Norway. It's a pity that this notion is absurd. The Trump administration has said that all options, including military action, are on the table to gain control over a territory it considers vital to U.S. security. It already has a limited military presence in the area. The meeting between U.S. Secretary Marco Rubio and Danish leaders scheduled for next week could provide further insight into the U.S. strategy on Greenland. ABN AMRO’s Kounis suggested that Trump may be following a similar strategy to other situations, such as trade tariff talks where an extreme scenario was put forward to soften the other side. Kounis stated that if the U.S. views an agreement settlement as beneficial to its military and economy, "part of it might be about getting leverage in future negotiations".
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A one-two-payrolls tariff sucker-punch?
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors hold their nerves as they await the U.S. Jobs Report that is expected to show a sluggish labour market, but one that has not yet collapsed. Meanwhile, markets prepare for a Supreme Court ruling regarding President Donald Trump's tariffs on global products. The 'prospect' of the ruling, that could be announced as soon as Friday, left the markets in a cautious mood. The U.S. Dollar stood tall, and stocks struggled to find direction. Oil prices are at their highest level in two weeks due to geopolitical tensions, but global defence stocks have been boosted by Trump's call for an increase in defence spending. The court decision will likely grab the spotlight and could spark a bout of severe volatility, after the sweeping tariffs shocked global markets last year. It's still notable that the markets were able to quickly recover from the initial shock of the tariffs and move higher. After the November 'arguments,' both conservative and liberal justices voiced doubts about whether Trump had the authority to levy tariffs under the 1977 International Emergency Economic Powers Act. A potential battle over the possibility of a $150 billion refund from the U.S. for importer duties paid already looms. The question is what will happen to the numerous trade agreements that were announced with great fanfare in the past year. The December employment report will give the markets the most accurate picture of the U.S. labor market, but it may not be sufficient to calm investor concerns about interest rates this year. The markets are pricing in two rate cuts this year, while a Federal Reserve deeply divided indicated only one. The Fed is expected to hold steady on rates later this month, according to traders. The report will shed light on the "no-hire, no-fire" mode that economists and policymakers call. A mega deal is brewing in the corporate world after Rio Tinto announced that it was in negotiations with Glencore to create the largest mining company on the planet, valued at nearly $207 billion. Rio Tinto and Glencore both said that they expected a buyout of all shares of Glencore, but very little information was disclosed. The following are key developments that may influence the markets on Friday. Economic events: German retail sales for November and German trade data for December
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Oil prices rise on worries about disruptions of supply in Venezuela and Iran
On 'Friday, oil prices rose for the second consecutive day, resulting in their third weekly increase, due to uncertainty over future supply from Venezuela and Iranian unrest. Brent futures gained 40 cents or 0.7% to $62.39 a barrel at 0400 GMT. U.S. West Texas Intermediate crude (WTI), however, rose 35 cents or 0.6% to $58.11. Brent will rise 2.7% this week while WTI is up 1.4%. "Bottlenecks of the flow of sanctioned barley and steady demand signals seem to counter the backdrop for an oversupplied in 2026 at least for now," said Priyanka Sahdeva, Senior market analyst at Phillip Nova. "Escalation of geopolitical tension adds to current momentum in oil price." Prices rose after U.S. President Donald Trump's seizure last week of Venezuelan President Nicolas Maduro and his claims that the U.S. would control the South American nation's oil industry. Concerns about supply have been heightened by civil unrest in Iran, a major Middle Eastern oil producer. Also, the Russia-Ukraine conflict has spread to Russian oil exports. Tina Teng is a market strategist with Moomoo ANZ. She said that the 'price surge' was primarily caused by Trump's claim of control over Venezuela's oil export. This could have led to a price hike from previously discounted sales. Sources familiar with the situation say that oil major Chevron, trading houses Vitol, Trafigura and others are competing to secure deals from the U.S. Government to export Venezuelan crude oil. Trump demanded Venezuela grant the U.S. access to all of its oil sectors just days after Maduro was captured on Saturday. ?U.S. Officials have stated that Washington will continue to control the oil revenues and sales of the country indefinitely. Two sources claim that the companies are disputing the initial deals for the marketing of up to 50,000,000 barrels of oil which the state-run oil firm?PDVSA accumulated during a severe embargo involving four tanker seizure. The market will focus on how Venezuelan oil stored in storage is sold and delivered in the next few days. Teng said that if there is no limit on sales, the oversupply issue could continue to be a problem. Haitong Futures reported in a Friday report that oil prices surged following several days of relative calm, partially correcting an earlier?neglect' of geopolitical risk. Internet monitoring group NetBlocks reported a nationwide internet blackout in Iran on Thursday. Protests over economic hardships were continuing in Tehran, Mashhad, Isfahan, and other parts of the country. Haitong Futures stated that global inventories continue to rise, but oversupply is the main factor that could limit the gains. Haitong Futures said that unless risks in the region of Iran escalate, the recovery is likely to be limited and difficult to sustain. Sam Li reported from Beijing, and Jeslyn Lerh edited the report in Singapore.
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Dalian iron ore drops on increasing portside inventories, but heads for a weekly gain
Dalian iron ore prices fell for the second time on Friday, due to higher portside inventories of this key ingredient in steelmaking. However, expectations that demand would improve kept prices on track towards a weekly increase. The May contract for iron ore on China's Dalian Commodity Exchange closed morning trade at 816 Yuan ($116.92), a 0.5% decrease. The contract is up 3.4% this week. By 0337 GMT the benchmark February iron ore price on the Singapore Exchange had risen 2.7% to $108.25 per ton. Data from Mysteel revealed that inventories of?imported ore in major Chinese ports had risen for the seventh consecutive week. They were up 1.9%?week-on?week by January 8 and close to the record high?of 162.8 millions tons. Mysteel data shows that steel inventories increased 1.9% from one week to the next, which also affected sentiment. Steelmakers' expectations that they will restock feedstocks ahead of the Lunar New Year holiday (February) and firm demand in the near term helped to limit losses in Dalian iron-ore futures. Investors also digested China's latest inflation data. China's annual consumer?inflation increased to a high of 34 months in December. However, the rate for the entire year?slammed to its lowest level in 16 years, while the producer deflation continued, supporting market expectations that more stimulus would be needed to boost the soft demand. Coking coal and coke, which are both steelmaking ingredients, traded at lower prices on the DCE. They were down by 1.08% and 2.13 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 1.04%, while hot-rolled coil dropped 1.11%. Wire rod was down 0.03%, and stainless steel was down 0.43%. $1 = 6.9792 Chinese Yuan (Reporting and editing by Subhranshu S. Sahu).
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Gold drops as US jobs data weighs ahead of commodity index adjustments
Investors positioned themselves ahead of the crucial U.S. Non-farm Payrolls Data due later that day. Gold spot fell by 0.4%, to $4,464.57 an ounce, as of 0353 GMT. However, it was still set for a weekly gain of 3%. Bullion reached a record-high of $4,499.71 on December 26, 2017. U.S. Gold Futures for February Delivery? firmed by 0.3% to $4473.60. The U.S. Dollar strength is a major driver of gold prices at the moment, ahead of the NFP data, said Ross Norman, an independent analyst. The U.S. Dollar advanced to a near-month-high as traders prepared for the U.S. Supreme Court's decision on President Donald Trump using emergency tariff powers. The'stronger dollar' makes the greenback-priced gold more expensive for holders of other currencies. Economists predict a modest increase in jobs of 60,000, and a slight decrease in unemployment to 4.5%. The Bloomberg Commodity Index Rebalancing, a periodic adjustment to commodity weightings in order to align the index with current market conditions, begins this week. "At the start of the new year, several indexes reweight the amount of gold and precious metals in them. Norman said that although there is a weakness in the index rebalancing, things are still 'quite positive'. HSBC says that gold prices could reach $5,000 per ounce by the first half 2026 due to rising geopolitical risk and debt. In an environment of low interest rates and economic uncertainty, non-yielding investments tend to perform well. Silver spot fell 0.5%, to $76.48 an ounce, after reaching a record high of $83.62 per ounce on December 29. The white metal is on course for a weekly increase of over 5%. After reaching a record high of $2,478.50 per ounce on Monday, spot platinum fell 1.8%, to $2,227.11 an ounce. Palladium remained steady at $1.786.18 an ounce. Both metals are also set to gain weekly. Ishaan arora reported; Sumana nandy, Ronojoy Mazumdar and Ronojoy Mazumdar edited.
Euro defence stocks reach record highs, dollar gains due to geopolitics
The European defence stocks rose to a "record high" on Thursday as oil prices and dollar gained ground. Geopolitical tensions rumbled from Venezuela to Greenland, keeping traders guessing.
seizure
Two Venezuelan-linked oil tanks in the Atlantic were reported alongside the news that U.S. Secretary Marco Rubio will?attend
Meet?Denmark leaders
Next week we will be discussing Greenland, and there are also some mixed economic statistics.
STOXX, Europe's aerospace and defence stock index, has risen nearly 2% in the first hour of a fifth consecutive day of gains. They have already risen 13% so far this year and over 260% since Russia invaded Ukraine in 2022.
Euro-dollar exchange rates are on course for their eighth consecutive drop, but mixed U.S. data from Wednesday kept dollar bulls at bay ahead of the closely watched nonfarm payrolls report on Friday.
Peter McLean is the Head of Multi-Asset Portfolio Solutions, Stonehage Fleming Investment Management.
While it is unlikely that we will see military action in Greenland, there is a clear impetus for increased defence spending in Europe.
Brent futures recovered above $60 per barrel on Thursday and U.S. Crude rose 0.5% to $56.30 per barrel.
Top U.S. officials stated on Wednesday that the country must control Venezuela's oil revenue and sales indefinitely in order to stabilize the economy of the latter, rebuild its oil industry and ensure it acted in America's interest.
Daniel Hynes is ANZ's senior commodities strategist. He said that the market's reaction to Trump's comments about Venezuelan oil control was a bit'misplaced'.
Oil prices would rise if the U.S. controlled oil sales continued in the short-term. I think that's why oil prices are rising.
Stocks in other markets were mostly lower after a positive start to the new year that lifted global markets.
The STOXX 600, a pan-European index, was down by 0.2%. Japan's Nikkei fell 1.6% over night amid increasing tensions with China, and Wall Street futures slipped 0.2%.
Charu Chanana is the chief investment strategist for Saxo.
Chanana said that "geopolitical headlines" were in charge, pointing out China's export ban for dual-use to Japan and the potential risk of rare earths.
Tokyo shares of Japanese chemical producers fell, while those of their Chinese competitors jumped. This was after China's Commerce Ministry announced that it would launch an anti-dumping investigation into the imports of "chemicals used for chipmaking".
PAYROLLS NEXT
Investors were also watching the U.S. initial weekly jobless claims, due later, and the closely watched non-farm payrolls employment report, due Friday. Both could give further clarity to the Federal Reserve on its rate outlook.
Goldman Sachs analysts predict a rise of 70,000 above the consensus in non-farm payrolls for December. They also expect unemployment to drop to 4.5%.
The data released on Wednesday painted a mixed image. JOLTS figures for the labour market bolstered the view that "no hiring, no firing" is the best way to look at the job market. However, the ISM services index in December reached a 14-month-high, which was reassuring.
The market's expectations for two further Fed rate cuts in 2019 were not altered by the readings. The 10-year Treasury yields were muted, at?4.15%. Germany's bund yields for the 10 year period were 2.8%. This is still down 7 basis points this week.
On the currency market, the yen of Japan rose to 156.67 yen per dollar, while sterling bought $1.3458 last time.
Silver and platinum fell 2.6% and 3.2% after recent gains.
McLean, of Stonehage and Fleming, said that the direction of bond rates is one of the biggest risk factors for this year. "I think it would be positive if the 10-year Treasury yield falls below 4 and continues to fall.
(source: Reuters)