Gold price falls below $4,000: Index rebalancing may bring over $3 billion in buying for gold

(1) As U.S. inflation remains persistently high and forces the Federal Reserve to continuously strengthen its hawkish stance, international gold prices fell below $4,000 per ounce this week and dropped below $3,900 on Thursday; since the beginning of this year, international gold prices have fallen nearly 10% in total.(2) On Thursday, a Societe Generale commodities analyst stated in a report that this sharp decline could bring more than $3 billion in buying demand for gold, as funds need to rebalance their exposure to the broader commodities benchmark, which includes the Bloomberg Commodity Index.(3) The bank's analyst noted that the annual rebalancing, scheduled to take place from January 8 to 14, is expected to make gold the biggest beneficiary; meanwhile, silver is also expected to see a $2.5 billion capital inflow due to the index rebalancing.