Gold Sheds 1% on Profit Taking, US Treasury Secretary News
Gold prices declined 1% on Monday as investors booked profits following a five-session rally to a three-week high, while the announcement of fund manager Scott Bessent as the new U.S. Treasury Secretary tempered safe-haven buying.
Spot gold was down 1% at $2,686.73 per ounce as of 1147 GMT, after declining 2% earlier in the session. U.S. gold futures shed 0.9% to $2,688.40.
Bullion had hit its highest since Nov. 6 in early Asia trade after posting its best weekly gain in nearly two years on Friday.
The two factors weighing on gold include profit taking after the solid rally last week, and the nomination of Scott Bessent as the next U.S. Treasury secretary with some market participants seeing him as less negative for a trade war, said UBS analyst Giovanni Staunovo.
Gold is traditionally seen as a safe investment during economic and political risks, while some strategists believe that Bessent's nomination was a relief as he understands markets and his appointment could reduce the chance of severe tariffs on U.S. trade partners.
Market participants are also watching out for the Federal Reserve’s November FOMC meeting minutes, GDP data (first revision), and core PCE figures, all due this week.
"The markets are broadly expecting the U.S. Fed to cut rates by 25 basis points at its next meeting on Dec. 18, although traders have scaled back bets on this outcome over recent days," Frank Watson, market analyst at Kinesis Money, said in a note.
Traders currently see a 56% chance of another 25 basis points rate cut in December, according to the CME Fedwatch tool,.
"We still look for a 25 bps rate cut by the Fed, but the more important part for markets will be if the dot plots suggest less rate cuts next year or not," Giovanni said.
Spot silver fell 1.6% to $30.81 per ounce, platinum was down 1.1% to $952.81 and palladium slipped 0.8% to $1,001.70.
Source : Reuters
