Gold extends losses as traders lock in gains

• Gold trades lower as bullish momentum fades below the $4,500 psychological mark.
• A firmer US Dollar and modest profit-taking weigh on Bullion despite a supportive macro backdrop.
• Geopolitical tensions and upcoming US labour data keep traders cautious.

Gold (XAU/USD) remains under pressure on Thursday, with prices extending their pullback for a second consecutive day as bullish momentum fades following a rejection near the $4,500 psychological barrier. At the time of writing, XAU/USD trades near $4,425, down nearly 0.60%.

The loss of upside traction has encouraged modest profit-taking, while a steady US Dollar (USD) is adding further pressure and keeping Bullion capped despite a broadly supportive macro backdrop.

Geopolitical tensions continue to dominate market sentiment. Investors are closely monitoring developments surrounding the ongoing United States (US)-Venezuela turmoil, as well as fresh rhetoric from US President Donald Trump on Greenland.

Meanwhile, continued expectations of further monetary policy easing by the Federal Reserve (Fed) should help cushion further losses and keep dip-buying interest alive near key support levels.

Looking ahead, traders await the weekly US Jobless Claims data due later on Thursday, ahead of Friday’s Nonfarm Payrolls (NFP) report, which could influence near-term Fed expectations and steer the next move in Gold.

Market movers: Rising geopolitical risks and US data keep markets cautious

• Adding to the headwinds, analysts note that precious metals may face a short-term price correction linked to the annual January rebalancing of the Bloomberg Commodity Index (BCOM). The reweighting is expected to take place between January 8-9 and January 15.
• In a New York Times interview on Thursday, US President Donald Trump said “only time will tell” how long direct US oversight of Venezuela might last, adding that he expects it to be “much longer” than a few months. Trump reiterated plans to rebuild Venezuela in a “very profitable way,” including using and selling the country’s Oil to push down global prices and generate revenue for both Venezuela and the US.
• On Wednesday, White House Press Secretary Karoline Leavitt said Oil from Venezuela is expected to arrive in the US very soon, adding that Washington has already begun marketing the crude and proceeds from sales set to settle in US banks under US government oversight. Meanwhile, US Energy Secretary Chris Wright told an energy conference that the US plans to oversee Venezuelan Oil sales “indefinitely,” saying controlling the flow of Oil and revenue gives Washington significant leverage.
• Adding to the geopolitical backdrop, US authorities on Wednesday seized a Russian-flagged oil tanker in the North Atlantic that was allegedly linked to Venezuelan crude exports, according to US officials. Meanwhile, reports say a bipartisan US sanctions bill backed by President Donald Trump could give the administration the authority to impose tariffs of up to 500% on countries that continue to buy Russian Oil.
• The White House confirmed that President Donald Trump is actively discussing a potential purchase of Greenland, citing its strategic value, and said the use of the military “is always an option.” The remarks have drawn sharp diplomatic pushback from Denmark and NATO allies.
• US economic releases on Wednesday painted a mixed picture of the economy. The ISM Services Purchasing Managers Index (PMI) for December climbed to a 14-month high of 54.4, beating expectations of 52.3. The ADP Employment Change report showed private payrolls rose by 41K in December, below expectations of 47K, but reversing the previous month’s decline of 29K. JOLTS data showed job openings fell to 7.146 million in November from 7.449 million, undershooting expectations of 7.6 million.

Technical analysis: Bulls lose grip as prices slip below $4,450

Gold’s near-term technical outlook has turned slightly bearish after prices failed to sustain a move above the $4,500 psychological level and extended losses below $4,450, a zone that now acts as immediate resistance.

Momentum indicators are reinforcing the softer tone. The Relative Strength Index (RSI) on both the hourly and daily charts is pointing lower after recently approaching overbought territory, suggesting bullish momentum is fading and buyers are stepping to the sidelines.

On the four-hour chart, the 100-period Simple Moving Average (SMA), currently near the $4,400 area, stands out as the first line of defence for bulls. A clear break below this level would likely increase selling pressure and expose the next support near $4,300, where buyers emerged earlier this week.