Spot gold was unchanged at $4,452.64 per ounce, after recording a session-low of $4,406.89 earlier.
U.S. gold futures for February delivery settled slightly lower at $4,460.70.
The annual Bloomberg Commodity Index rebalancing, a periodic adjustment of commodity weightings to keep the index aligned with market conditions, begins this week.
“There’s just going to be pressure for the next few sessions on gold and silver while that commodity index readjusts,” said RJO Futures senior market strategist Bob Haberkorn.
“Once the dust settles into mid-next week, it’s going to present a good opportunity for the longest to get back in this market.”
Investors are looking ahead to U.S. nonfarm payrolls data due on Friday for more clarity on the Fed’s monetary policy, with a Reuters poll forecasting 60,000 jobs added in December versus 64,000 in the prior month. The unemployment rate is seen easing to 4.5% from 4.6%, according to the poll.
The market is currently pricing in two interest rate cuts by the Fed this year.
Gold, a non-yielding asset, tends to do well in low-interest rate environment.
Data showed U.S. jobless claims rose moderately last week, following reports on Wednesday that job openings fell more than expected in November and that private payroll growth undershot forecasts in December.
Meanwhile, ongoing geopolitical tensions were underscored by the seizure of two Venezuela-linked oil tankers in the Atlantic, while U.S. officials reportedly discussed offering lump-sum payments to Greenlanders in a bid to encourage secession from Denmark and potential alignment with the United States.
HSBC now sees gold hitting $5,000 per ounce in the first half of 2026 on geopolitical risks and rising