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Gold prices extended losses in early European trading on Thursday, retreating from sharp gains earlier in the week as a firmer US dollar weighed on demand ahead of key US labour market data and as investors assessed Washington’s pressure on Venezuela.
Gold futures (GC=F) fell 0.6% to $4,437.20 an ounce, while spot prices retreated 0.9% to $4,427.74 at the time of writing. Prices remain less than $110 below last month’s record high of $4,548.92.
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“Traders are weighing heightened geopolitical tensions, including US intervention in Venezuela … against macroeconomic signals from the United States,” Bernard Sin, regional director of Greater China at MKS PAMP, told Reuters.
Softer US jobs data has boosted expectations of further Federal Reserve rate cuts, lending support to non interest bearing bullion. However, sentiment remains balanced as investors remain alert to volatility and the potential for profit taking at elevated price levels, Sin added.
Investor attention will turn to US non-farm payrolls data due on Friday for further signals on the outlook for monetary policy.
Geopolitical tensions offered some counterbalance to the declines, with continued developments involving the US and Venezuela supporting safe haven demand for gold (GC=F).
Oil prices were little changed on Thursday, halting two consecutive days of declines, as a larger than expected draw in US crude inventories encouraged some investors to buy futures while monitoring developments in Venezuela.
Brent crude futures (BZ=F) were flat at $59.99 a barrel, while West Texas Intermediate (CL=F) was muted at $55.98 at the time of writing.
Both benchmarks had fallen more than 1% for a second straight session as expectations of ample global supply weighed on prices. Analysts at Morgan Stanley estimate a surplus of as much as 3 million barrels a day in the first half of 2026.
The recent declines prompted some traders to take advantage of lower prices, said Mitsuru Muraishi, an analyst at Fujitomi Securities.
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“Pullback buying has nudged prices slightly higher, but persistent oversupply concerns are capping upside momentum. While markets are watching developments in Venezuela, the downward trend is likely to continue for now,” he said, adding that WTI was likely to fall below $54.
US crude inventories fell by 3.8 million barrels to 419.1 m barrels in the week ended 2 January, according to the Energy Information Administration.
On Tuesday, Washington announced an agreement with Caracas that would allow access to up to $2bn worth of Venezuelan crude. Venezuela would be “turning over” between 30 million and 50 million barrels of “sanctioned oil” to the US, president Donald Trump wrote in a social media post.
Sterling fell against its major peers on Thursday as traders preferred to stay on the sidelines ahead of key US employment data due on Friday.
The pound was down 0.2% against the dollar at $1.3438 and 0.1% down versus the euro at €1.1508.
The US dollar index (DX-Y.NYB), which measures the greenback against a basket of six major currencies, was up at 98.80.
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Markets were cautious as investors awaited a series of important US economic releases. Weekly US initial jobless claims data were due later in the day, ahead of the closely watched non farm payrolls report.
December US labour market data will be in focus on Friday for clues on the future path of interest rates. Non-farm payrolls are expected to increase by 60,000, while the unemployment rate is forecast to edge down to 4.5% from 4.6% in November.
Stronger than expected data could temper expectations for further easing by the Federal Reserve, potentially boosting the dollar and weighing on sterling.
In equities, the FTSE 100 (^FTSE) on Thursday was still trading above the 10,000 mark but down 0.2% at 10,028 points. For more details on market movements, check our live coverage here.
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