Today, gold prices experienced a significant drop of around $100 as risk-on sentiment returned. The main reasons behind this were the rumors circulating about a potential Israel-Lebanon ceasefire deal and the announcement of Scott Bessent as the US Treasury Secretary.
US Treasury Pick Confirmed
Market participants reacted positively to the news of Scott Bessent’s appointment as the US Treasury Secretary by President-Elect Donald Trump. Bessent’s Wall Street experience is seen as a stabilizing factor in Trump’s administration, calming concerns about extreme policies. His focus on trade levies and reducing the budget deficit through deregulation and boosting energy production led to a drop in Treasury yields and a weaker dollar.
Israel-Lebanon Ceasefire Deal Nears, Russia-Ukraine Rumbles on
Rumors of an imminent ceasefire deal between Lebanon and Israel contributed to the downward spiral of gold prices. However, escalating tensions between Russia and Ukraine added a layer of uncertainty, potentially impacting precious metal prices moving forward.
Economic Data Ahead
With the FOMC minutes scheduled for release, investors are eager to gain insight into the Fed’s stance on a Trump Presidency. The interplay between politics and policy decisions will be closely monitored in the coming days.
Technical Analysis Gold (XAU/USD)
From a technical standpoint, gold is currently down around 3.21% with a bearish trend on the daily chart. Support levels at 2625 and 2600 could be crucial, while resistance levels at 2639, 2650, and 2673 may pose obstacles for any potential recovery.
Support: 2625, 2600
Resistance: 2639, 2650, 2673
Overall, the geopolitical landscape and policy decisions are driving gold prices in the short term. Investors should monitor developments closely to make informed decisions about their investments.